Xenon Pharmaceuticals Inc. Stock

Good day, everyone, and thank you for standing by. My name is Brilla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Xenon Pharmaceuticals Conference Call. [Operator Instructions] I would now like to turn the call over to Colleen Alabiso, Senior Vice President of Corporate Affairs at Xenon. Please go ahead.

Thank you. Good afternoon. Thank you for joining us on our call and webcast to discuss the azetukalner NDA submission and psychiatry program update. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer.

After completing our prepared remarks today, we will open the call up for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking within the meaning of applicable laws and regulations, including statements regarding the timing of and potential results from clinical studies, the potential efficacy, safety profile, future development plans in current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates.

The efficacy of our clinical study design, our ability to achieve milestones in our clinical development programs, including the completion of trial enrollment and the timing of top line data readout from any studies, the timing and results of regulatory filings and our interactions with regulators, and our ability to successfully obtain regulatory approvals. Today's press release summarizing Xenon's azetukalner business update will be made available under the Investors section of our website at xenon-pharma.com.

I'll now turn the call over to Ian.

Thanks, Colleen, and good afternoon to everyone joining us today. We'll start with brief remarks on the status of our new drug application in epilepsy, and then we'll move on to more detail on the psychiatry program updates. First, we're excited to share that we have submitted the new drug application, or NDA, for azetukalner to the U.S. FDA for the treatment of focal seizures, which is a big step forward to fulfill our goal of becoming a fully integrated neuroscience company.

The NDA submission is based on positive clinical data from 2 pivotal randomized, double-blind, placebo-controlled trials for azetukalner in focal seizures, including the Phase IIb X-TOLE study and the Phase III X-TOLE2 study. Across both studies, treatment with all 4 doses of azetukalner, or AZK, demonstrated a statistically significant reduction from baseline in monthly seizure frequency compared with placebo.

X-TOLE2 outperformed X-TOLE with a 42.7% placebo-adjusted median percent change, or MPC, which, to our knowledge, is the highest placebo-adjusted MPC ever seen in a pivotal focal seizure study. Azetukalner was generally well tolerated with a consistent safety profile observed in both studies as well as the long-term safety observed in open-label extension, or OLE, studies such that across the entire epilepsy program, we now have more than 1,500 patient years of safety and exposure data.

Our NDA submission is a significant milestone for Xenon as we continue to work towards the potential approval and launch of our first product. We also continue to broaden the potential geographic and therapeutic reach of azetukalner in epilepsy as we continue enrollment in our Phase III X-TOLE3 and X-ACKT studies of azetukalner in focal seizures and primary generalized tonic-clonic seizures, respectively.

In parallel, we continue to raise awareness and educate HCPs on our X-TOLE2 data across the epilepsy community. For example, our team recently returned from the European Epilepsy Congress meeting in Athens, Greece, where they interacted with hundreds of HCPs and key opinion leaders throughout the meeting. In addition, we had 6 presentations over the course of the Congress. It was incredibly gratifying to hear unsolicited comments during our X-TOLE2 podium data presentation where 2 KOLs shared stories about how their patients' lives were significantly impacted with AZK.

Beyond these congresses, our MSLs have been out in the community responding to HCP requests to learn more about our data. Epileptologists and general neurologists consistently provide us with positive feedback and excitement for both the X-TOLE2 results and AZK's differentiated profile, including a novel mechanism of action, rapid onset of effect, durable reductions in seizure frequency, a generally well-tolerated safety profile as well as once-daily dosing without titration and no need for dose adjustments for other antiseizure medicines.

We feel increasingly confident in AZK's potential to become a preferred add-on therapy for the significant number of patients who do not achieve seizure control with initial treatment. Now with our NDA submission complete, we continue to focus on building awareness of Xenon as an emerging leader and committed partner to the epilepsy community.

Beyond epilepsy, we have been exploring the potential of AZK in psychiatry, where we believe Kv7 modulation may provide a new treatment option for patients with depression, offering a different mechanism of action from the therapeutic options that are available today to help address significant unmet medical needs. We initiated our Phase III program in psychiatry based on the results of our Phase II X-NOVA proof-of-concept study, showing clinically meaningful improvements in depression and anhedonia with early onset to efficacy and a favorable safety profile.

We are currently running 2 Phase III studies in MDD, X-NOVA2 and X-NOVA3, as well as a Phase III clinical trial in bipolar depression, the X-CEED study. These 3 studies are evaluating 20 milligrams of azetukalner compared to placebo. As announced today, we have voluntarily initiated a temporary pause in enrollment for new patients in our studies in major depressive disorder and bipolar depression following a recent analysis of neuropsychiatric adverse events in these studies.

We initiated this enrollment pause as a precautionary measure in consultation with the Data Safety Monitoring Board, or DSMB, and we expect it to be temporary. All patients currently enrolled in the randomized controlled psychiatry studies and associated OLE studies will continue on study. It's important to note that this voluntary action does not impact our ongoing epilepsy studies where we continue to enroll new patients, and we remain highly confident in the approval and commercial potential for AZK based on its strong efficacy and safety profile in epilepsy.

The pause is based on a review of adverse events across the ongoing studies in psychiatry. Specifically, we observed some neuropsychiatric adverse events, which were mostly mild or moderate in nature. The number and severity of the events are consistent with the known profile of azetukalner and what we have seen across over 1,500 patient years in epilepsy.

Although these are well-understood adverse events for this mechanism and for azetukalner, they were not observed in our Phase II X-NOVA proof-of-concept study in MDD, where AZK was very well tolerated. Therefore, we have made the decision to temporarily pause new patient enrollments in the MDD and BPD studies to make adjustments to the dosing, which we believe will improve tolerability in psychiatry.

We expect to make these adjustments to the studies over the coming months. Given this pause, we have also decided to complete X-NOVA2 enrollment based on the approximately 360 patients enrolled to date, which provides for a well-powered study that will enable us to evaluate the efficacy and safety of azetukalner in MDD in the context of a Phase III program. So we now expect top line results for X-NOVA2 in the first quarter of 2027.

So I'm now going to pass the call over to Chris, who can provide some additional perspective.

Okay. Thanks a lot. First, I want to echo Ian's statements about how excited we are to have achieved a major milestone of submitting the AZK NDA in focal onset seizures. Today is an important day as we move closer to bringing this meaningful medication to people living with epilepsy.

Now moving to the psychiatry program. It's important to review the scientific hypothesis and support for this clinical development program. Our hypothesis for AZK in depression is based on scientific evidence that Kv7 modulation could offer a novel mechanism to help treat MDD and BPD where innovative treatments are urgently needed, especially those that may also impact anhedonia and that have the potential to offer differentiated tolerability profiles.

Evidence includes our own Phase II proof-of-concept X-NOVA study, which showed promising signals of antidepressant effects for the Kv7 mechanism as well as genetic links in BPD with Kv7, including evidence of Kv7 downregulation. As you've heard from me before, the safety profile was benign in our Phase II proof-of-concept X-NOVA study, which had lower incidence of adverse events compared to what we saw in epilepsy.

In the X-NOVA study, mild to moderate adverse events were low, and no serious adverse events were observed in the active treatment arms. As we have treated more depression patients in the Phase III studies, both the blinded randomized studies and in OLE, we have seen certain neuropsychiatric adverse events. Those adverse events were mostly mild or moderate in nature and not new safety signals.

And based on what we know, the rate and severity of those events are consistent with the mechanism of action and the extensive data we have for approximately 1,500 patient years of exposure in epilepsy. Therefore, what we're seeing in psychiatry, which is consistent with epilepsy, is a small percentage of patients with confusion, aphasia, ataxia, and a very small number of patients we have seen an adverse event captured under the broad preferred term of psychosis.

For example, in the epilepsy randomized studies, there was 1 patient in X-TOLE and 1 patient in X-TOLE2 with psychosis. It's important to note that the neuropsychiatric events seen in epilepsy or psychiatry are short in duration and reversible, without any long-term sequelae. Therefore, we're pausing recruitment to institute changes to improve tolerability within these patient populations, MDD and BPD.

For example, based on work across the AZK program and consistent with other CNS drugs broadly, dose escalation can often have an impact on improving tolerability, and we are evaluating this as an option in our psychiatry program. We'll be in a position to share our plans in the coming months. Given this pause in enrolling new patients in psychiatry for the X-NOVA2 study, we've decided to close enrollment with the approximately 360 patients who have already been enrolled, and we now anticipate top line data readout in the first quarter of 2027.

Completion of X-NOVA2 will give us a good look at the overall clinical benefit in an MDD patient population and a fuller understanding of the adverse event profile. Based on our initial target enrollment of 450 patients, X-NOVA2 was powered at 90% to show a 2-point difference from placebo on the primary endpoint of the HAM-D17.

With current enrollment at approximately 360 as well as an analysis of the standard deviation, we believe the study is sufficiently powered at 90% to demonstrate a 2.5-point placebo-corrected difference, which is clinically meaningful. As a reminder, in the Phase II proof-of-concept X-NOVA study, we saw a 3.1 point separation from placebo with 21 milligrams using the HAM-D17 at week 6.

Finally, before I conclude my remarks, I want to emphasize that this is a very exciting time for Xenon with the completion of the NDA for azetukalner. I want to congratulate the team for this accomplishment. With more than 1,500 patient years of safety and exposure data, we are confident that AZK's profile is consistent with other well-tolerated antiseizure medications and is indicative of a drug that is potent and active in the central nervous system.

AZK has the potential to deliver much-needed innovation to treat focal seizures in epilepsy with strong efficacy, a differentiated mechanism to add on, once-daily dosing with no dose adjustments for other ASMs and a generally well-tolerated safety profile. Ongoing scientific exchange opportunities have affirmed our belief that, if approved, AZK will provide an important therapeutic option with appeal to epilepsy specialists, general neurologists and advanced practice providers alike.

With that, I'll turn it back to Ian for closing remarks. Thanks.

Great. Thanks very much, Chris. We remain focused on our mission of delivering innovative medicines to provide a brighter future for people living with neurological and psychiatric disorders. We are making great progress towards the potential launch of AZK as an important new treatment option for patients living with focal seizures, and we're working to make the necessary adjustments in our psychiatry program that we believe will have a positive impact on the adverse event profile in the best interest of patients and the program.

So with that, operator, we can now open the call up for questions.

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

So I think when looking back at some of the data, right, I remember you guys seeing confusional AEs in Phase I healthy studies like we see with a lot of antiepileptic drugs. But can you just expound upon the psychiatric, or I guess, the psychosis AEs? And like how -- I guess, just in the grand scheme of things, like how problematic is this to the risk-benefit overall in MDD if the drug works, like do you actually think you have a registerable and commercially viable profile on this based on what you've seen today?

And then maybe just like secondarily, is there any plan here to like engage the agency or any need to engage the agency? Or do you feel comfortable that just in terms of studying the drug, like the risk-benefit here is still overwhelmingly favorable and there's no regulatory issue?

Thanks, Paul. I'll take your second one and then maybe make a couple of comments, and then Chris can go into a little bit more detail on kind of the -- what's really a rare event of psychosis that, as we said in the prepared remarks, we've seen a couple of patients in the epilepsy program.

Overall, this was -- just to be clear, and I think we were in the prepared remarks, this was a decision that we made as a company to pause the psychiatry program for new enrollment, and patients that are on study will continue on study, both in the double-blind randomized portions as well as in the open label. In terms of FDA, so we've given notice to FDA on what we're doing, and we've given notice, obviously, to our clinical sites. But we believe that we'll continue to move forward in terms of making the necessary adjustments, making those adjustments to the protocol, and moving forward.

Overall, on the adverse event profile, as we said, the profile in epilepsy is obviously incredibly well understood with all of the exposures. And we see, as you know, dose-dependent adverse events, things like dizziness and somnolence. And then to a lesser extent, we see some of these events like confusion or aphasia or ataxia.

And then as we said, in a very small number of patients, we've seen something kind of under this broad preferred term of psychosis. And as we mentioned, we saw 1 patient in X-TOLE and 1 patient in X-TOLE2, just to give you a little bit of that background, because I think it's important to note that what we're seeing in psychiatry is consistent with what we're seeing in epilepsy. Chris can give you a little bit more detail.

Yes. Thanks a lot, Ian. So just as a reminder, Paul, we -- when we relayed the X-TOLE data, the Phase IIb study, there was one patient within that study that had psychosis. And then there was a similar pattern in X-TOLE2, whether -- again, we relayed one patient in that study that had psychosis as well. So you can kind of do the numbers. It's hovering around 1% or under.

The important point about these is that they're reversible, that they're relatively short-lived, and that none of these patients have had any long-term negative effects from these events. I think those are like the critical points.

If you look at other drugs that are used for depression, they do cause serious adverse events in -- sometimes in keeping with this along the lines of psychosis, sometimes other issues. And so we don't think that this is something that prevents this drug moving forward. We view this pause as temporary. We're going to make some adjustments and then go forward.

And maybe, Paul, I'll just have -- Darren is here with us as well. Maybe Darren can just provide his comments on -- I mean, Chris talked about the overall profile and comfort moving forward. Obviously, we need to unblind our Phase III program and determine the efficacy in major depressive disorder [indiscernible] commercial profile as well.

Yes, Paul. Clearly, I think with -- we believe this mechanism is important in this MDD patient population. And any signs of efficacy provides a tremendous -- still a tremendous opportunity because of the unique mechanism and some of the characteristics that AZK will provide for patients. And I do think to Ian's point, when we unblind X-NOVA2, it will be important for us to think about moving forward. But we really remain very optimistic about the commercial opportunity.

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

So just to kind of follow up here, what specifically leads you to think that maybe a dose regimen change might help you alleviate this, though it seems like it's quite rare. And can you talk a little bit about any kind of dosing modifications that you might want to look at here? And final question from us is just to be clear, do you see any read-through to the known profile that you have here in epilepsy based on the over 1,500 patient years of safety and exposure data that you have?

Thanks, Tess. So maybe let's start with your epilepsy question because I think that's critically important. Today was a big step forward for us. This is the first new drug application that we filed as an organization and really starts the clock in getting us closer to being a fully integrated company and commercializing AZK in epilepsy.

We have done an incredible amount of drug development on AZK. I think we understand the profile incredibly well, and we know it incredibly well in epilepsy. As we shared for the first time today, we have over 1,500 patient years of exposure in epilepsy. So we understand both in a double-blind randomization -- the randomized period in X-TOLE and X-TOLE2. And then as you know, we now have patients that have been on the drug for more than 5 years. So we have a really good understanding of the profile.

And over the last number of months, we've had a chance of writing an NDA. So putting together an ISS really under -- putting together our arguments on benefit-risk, and we're highly confident, obviously, in the application, the approval and how important this medicine is going to be in treating patients with focal seizures.

So absolutely nothing has changed there. As we move to psychiatry, today's pause is really about, can we make some adjustments to improve the tolerability profile. And as Chris mentioned in his remarks, this is very common in CNS drug development, and we gave an example of dose escalation to manage around tolerability. And we believe we can make some adjustments that has the potential to have that positive impact on the tolerability profile. So we felt it was the right time to make those adjustments.

We're going to have X-NOVA2 at 20 milligrams. And those data are going to be available quicker than we had expected. So those are going to be available in Q1 of next year. That will give us a really good understanding of the benefit-risk, efficacy and safety. And then in X-NOVA3, we'll have the opportunity to make this adjustment where we can see is the adjustment, in dosing that we're still working through, but we have some really good ideas, and we gave the example of dose escalation, the -- what impact will that have, and then we can compare that to the overall profile without the changes in dosing.

So I feel like we're in a good spot right now. We can make these adjustments, no read-through to epilepsy, and we're going to learn a lot about this drug in psychiatry over the coming quarters.

Maybe just I'll build on that. We've shared the Phase II and the Phase III epilepsy studies. There's a bunch of work that has to be done with the NDA-enabling studies to enable the submission, which we've done. And in the context of doing that, some of those studies, the details of which have not been shared publicly, have allowed us to use gradual increases in doses. So we do have some data on that front.

And then also within the epilepsy program, as patients go from whatever they were randomized to, say, placebo or lower dose or higher dose, and then they go to the open-label study, you can get an idea of whether someone tolerates the drug better if they were started on a lower dose and then transition to a higher dose or not. So it's sort of triangulating all that data is leading us down a path where we think that dose escalation is, at least, one of the options we should seriously consider to improve tolerability.

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

This is Matt Barcus calling in for Andrew Tsai. I just wanted to ask, as you saw these safety signals emerge, did you notice that they came as like -- was it earlier on treatment? Or was it with longer drug exposure? And then with your NDA submission for epilepsy, do you see anything changing with your overall launch strategy there? Do you still -- do you think that with the new safety signals in psychiatry, any impact on general neurologist comfort levels with prescribing AZK?

Thanks, Matt. I'm happy to take your first question, and then I'll pass it to Darren because Darren has been ramping up aggressively and getting ready for launch. And so he can comment there. Overall, I would say -- and this is a general statement, and we're not going to get into kind of specifics here. But as a general statement, most of the adverse events that you see with azetukalner, which is consistent with other drugs that are very active in the CNS, generally show up early, and patients tolerate them over time.

And so that's kind of a general rule that we see as well. Obviously, that's not for every single patient. But like I had mentioned earlier, I think we have a really good understanding of the profile of this medicine. But as a general rule of thumb to answer your question, patients that do show adverse events kind of across the board, generally, those are on either changes in dose or initiation of dose. But I think your second question is a really good one. I'll pass it to Darren just to talk about our launch plans.

Yes. With today's NDA submission, as we said, we're one step closer to becoming a fully integrated biopharma company, and nothing changes on our launch plans for AZK in focal onset seizure.

Post the X-TOLE2 data, we've been able now to actually do market research, advisory boards, and we referenced most recently last week in Athens with a lot of physicians the profile of AZK with patients with focal, whether it's with epileptologists or general neurologists, they couldn't be more excited about the efficacy that we show, the safety profile, as we point out, generally well tolerated, and really no surprises for them as they treat these patients with focal seizures with other antiseizure medications.

And obviously, we've talked a lot about and really rings through which will make us a differentiator in the market as our ease-of-use attributes. So I think that as we think about the read-through of this with epilepsy, I don't see any at all. And so we're super excited and continue to be emboldened every day as we prepare for the launch of AZK in focal seizures.

And then, Matt, just one quick thing. You're going back to your question about the early part. We do see rapidity of onset with this drug, whether you're talking about the depression study or you're talking about the focal onset seizure studies.

From an efficacy standpoint, we see efficacy quickly. And then many of these adverse events, particularly the ones that we're talking about right now, tend to happen earlier rather than later. And it's a really important point. I'm glad that you asked it. And it's one of the reasons that ties into why we think that going up more gradually in the dose will improve tolerability in the context of the psychiatry program.

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

Apologies. This is Luke on for Brian. So from your analysis of the epilepsy and neuropsych trials, are there underlying familial or other risk factors for psychosis that the patients may have demonstrated? Does it seem largely stochastic in nature? And with regard to monitoring, do the AEs seem correlated with other AEs such as confusion or others?

Yes. Sure. Thanks, Brian. Thanks for the question. So we're looking really closely at what sort of predictors could there be for these adverse events. The biggest challenge is that they don't happen that often. And so it makes it really tricky to be able to figure that out. So, so far, there isn't anything that's leaping out from the data that gives us an obvious answer to that question, although we're going to continue to look.

Yes. I think, Luke, with that -- that was your question, right? Was there something you had before that?

Yes. Just, I guess, the risk factors and then the correlation with other AEs.

Yes, yes, that was it. Yes. So it is -- there are certain -- most patients, I would say, we're seeing these as isolated, although there are some that where there's a clustering of some of these adverse events depending on -- from one patient to another. Generally, they're isolated.

And your next question comes from the line of Joseph Thome with TD Cowen.

Maybe can you provide a little bit more detail about what triggered the analysis? Was this sort of a preplanned DSMB meeting? Or is there something specific that kind of triggered it, like discontinuations or anything? And then second, why do you think you didn't see these AEs maybe in X-TOLE? Do you think there's anything different about the baseline populations that you enrolled? Or is it just a symptom of enrolling a couple of hundred more patients in these trials?

Thanks, Joe. I'm happy to take it. And I think in your question, you said X-TOLE, but I think you were probably referring to the X-NOVA, right, the Phase II psychiatry study. I think you're probably aware, so I'll carry on with that. We had -- obviously, we always track blinded data in all of our studies. And so we have a bit of an indication. Obviously, now in the Phase III psychiatry program broadly, we've enrolled hundreds and hundreds of patients, and so we're getting a better idea of that.

And then in consultation with our DSMB, we had a review like we do with our DSMB across all of our programs, had a review of the data. And that discussion between us and the DSMB resulted in the pause of the psychiatry program. And I think, really, a discussion between us and the committee about making some of the adjustments that we've talked about. And I think Chris, in the last couple of questions, has provided really good answers on kind of why we have confidence in making the adjustments that we're going to make going forward.

And then I think you -- I think the question -- the second question you had was really we didn't see these adverse events in the Phase II proof-of-concept study, which was the X-NOVA study, which Chris' prepared remarks used the term that it was reasonably benign, and it really was. We -- and so as we got into a larger patient population, there's nothing that we see in the data that it's a different patient population, but rather it was a small proof-of-concept study.

And as we went to a larger study, we're seeing these events that as we've characterized them, no -- nothing new, well understood and really consistent with the profile that we've been seeing for a number of years across studies in epilepsy.

And your next question comes from the line of Brian Abrahams with RBC Capital Markets.

This is Nevin on for Brian. Brian is tuning in, but it's just a little bit of a noisy environment. So just taking the question for him. We were just wondering if you had seen any particular imbalances in these AEs coming from either the bipolar trial or the MDD trial. Anything about the kind of nature of the patients that might have resulted in these AEs that you're seeing?

And just given that we saw a recent similar kind of clinical pause from a competitor of yours with the same class. Just wondering if you think this might -- although we don't have any additional kind of color on that, just wondering if there might be potential for class effects here or if this is something that regulators might want to see, how you think that might impact potential label in epilepsy, whether there could be a black box, any other considerations that we should take into account?

Thanks, Nevin. You had a bunch there. So if we missed some of them, just jump back in and we can come back to them. So I'll start on some of these. And then, Chris, if you can give your perspective. Obviously, we know a lot more in the MDD program, just given the advanced stage of X-TOLE2 -- or sorry, of X-NOVA2 and X-NOVA3. So obviously, we know a lot more.

My comment, Nevin, and Chris can provide his perspective, is we know a lot more about the MDD profile than we do about the bipolar profile just on kind of where those studies are and how many patients we've enrolled across those 2 therapeutic indications.

Look, your question on what -- we've read what you've read in the public domain on a partial clinical hold from another Kv7 drug, and we don't have any more information than that, but there's nothing that we would believe in what we've read publicly there that there's any connection to the adverse event profile of azetukalner that's incredibly well understood.

Obviously, we've done a huge amount of drug development in -- with azetukalner over the last almost decade, not only the large randomized studies that we've talked about, but as Chris had mentioned earlier, we've done a huge amount of work on clinical pharmacology. So we have a really good understanding of this profile, which is very consistent with this mechanism and a very active drug in the CNS and the data that we're seeing.

So I don't expect that this is anything that's broader than what the 2 Kv drugs are specifically just working through. But Chris, maybe you can just talk about -- Nevin had a question about the imbalances. I think it's really too early to tell until we get a little bit more advanced. And obviously, we haven't unblinded any of these Phase III studies.

Yes. You asked about the nature as well. So the nature is similar between all the populations. And then since there are ongoing studies, I can't answer your question about what the imbalance is. And we will -- in Q1, we'll have an answer to that question when we unblind X-NOVA2.

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

This is John on for Myles. So wondering if in the latest OLE data cut out to 7 years in X-TOLE, if any of these neuropsych issues were observed? And if so, at what doses? Or are these events really just limited to early dosing? And second, wondering if you could just talk to the magnitude of any potential dosing changes you could take to move forward here, especially with the knowledge that you've gained from the X-NOVA Phase II, which was dose-ranging.

Thanks, John. So maybe I'll take the second part and then Chris can take the first part in terms of, obviously, we have a huge amount, as you mentioned, open-label data, especially you had referenced the X-TOLE program, where we have patients that are out more than 5 years now. Just as a reminder, when patients go from a double-blind to an open label, some of those patients are on placebo. So they're still getting exposure to the drug for the first time in open label. And as Chris had mentioned, some of them are changing dose if they were going from a lower dose to a higher dose.

In terms of what we learned from the X-NOVA program, as a reminder, the X-NOVA program, we had 2 active doses and placebo, 10 and 20 milligrams, reasonably small study, just over 50 subjects per arm. We saw a clear dose response. And so 10 milligrams, as we think about the key endpoints of the -- clinical endpoints of depression like HAM-D17 or MADRS or the endpoint of anhedonia measured by SHAPS, we saw a clear separation between 10 milligrams and placebo, and 20 milligrams outperformed 10.

But this is really consistent about this drug and this mechanism across all of the indications that we've tried it in, right? There's a clear dose response, both in terms of efficacy. In epilepsy, we've tested 10, 15, 20, and 25 and in depression, we've tested 10 and 20. And as you go up in dose, you see a greater effect on the efficacy measure, and you see increased adverse events as well. So it's a really kind of well-behaved drug and well understood from a pharmacology point of view.

And I don't think that's any different. And so obviously -- any different whether we're thinking about psychiatry or epilepsy. And so that -- and then taking into consideration the potential for dose escalation, I think is really how we're thinking about the plan moving forward that I think we have a plan where we can help mitigate some of these adverse events in psychiatry. But Chris, do you want to mention -- do you want to go through the OLE data?

Yes. I mean -- so first of all, we're going to be sharing the data in detail again at the American Epilepsy Society at the end of the year and also kind of getting into some of the pooled data that's being submitted to the NDA for FDA today. Ian sort of already answered your question. So there's -- depending on which study you look at, there's more patients in active than placebo. And so there's a minority of the patients are going into the open label from the double-blind studies, but some of them haven't been exposed to AZK.

And so these events are happening. It's even less rare because most of the patients have already been exposed to drug, and only a fraction of them are now being exposed to placebo. But it's in keeping with what we've seen in the double-blind, but to a lesser extent because of the less newer exposures.

And just one other thing. I mean, you said what is the magnitude of the dosing changes. We need to work this out, but we know our data really well, and I've kind of -- in answer to Tessa's question, I talked about some of the clinical pharmacology studies that we've done. And so we are heading down, I think the dose escalation path makes a lot of sense. And if that's the path that we choose, we just need to mobilize drug supply, and this would be a temporary pause.

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

This is Adi on for Cory. Can you please again explain why is there no epilepsy implication if the events are mechanism-consistent given epilepsy uses 25 milligram versus 20 milligram in psychiatry?

So I mean, just to be clear, I mean, we are seeing a pattern. What we are seeing within the depression population has been seen in epilepsy. It's been shared with the outside world. We talked about one case in the X-TOLE study. We talked about one case in X-TOLE 2. Now what the difference here isn't that these events have gone up in epilepsy. What's gone up here is that we have more exposures in the depression population. And as a result of that, we are starting to see similar patterns in the MDD population.

So the reason why we say that there's no implication in epilepsy is because we have 1,500 patient years of exposure in epilepsy. We know that data really well. We've shared all that relevant data with the outside world, and nothing has changed on that front. I mean the big question is, why did we not see any of this in Phase II and now it's sort of emerging at relatively slow rates in Phase III? And there's some speculation around that. One thing that's obvious is that we have substantially more patients on AZK in that population. And therefore, you're better able to detect a relatively rare event.

All right. And that concludes our question-and-answer session. I would like to hand it back to Ian Mortimer for closing remarks.

Great. Thanks, everyone, for joining us today. If we didn't get a chance to get to your question during the allotted time, please reach out to us directly, and we'll be available to connect. And we look forward to providing additional updates as we move forward as we advance our programs and deliver on important milestones. So operator, we can now end the call.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Ladies and gentlemen, thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2026 Xenon Pharmaceuticals, Inc. Earnings Conference Call.

I'd like to remind everyone that this call is being recorded. [Operator Instructions]

I would now like to turn the call over to Ms. Colleen Alabiso, Senior Vice President of Corporate Affairs at Xenon Pharmaceuticals, Inc. You may begin.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's second quarter 2026 Financial and Operating Results.

Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer.

After completing our prepared remarks today, we will open the call up for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans in current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates, the strength of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, including the anticipated filing of INDs or equivalent and NDAs.

The timing and results of those filings and our interactions with regulators, our ability to successfully obtain regulatory approvals, anticipated timing of top line data readouts for our clinical trials of Azetukalner and other candidates and our expectation that we will have sufficient cash to fund operations into 2029.

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

Thanks, Colleen, and good afternoon to everyone joining us today. We are excited to recap another productive quarter for Xenon as we work toward our goal of becoming a fully integrated neuroscience company, delivering life-changing medicines to patients.

In the second quarter, we remain focused on three key areas:

First, preparing our new drug application for Azetukalner or AZK for focal seizures as well as sharing our exciting Phase 3 X-TOLE2 results with healthcare providers and preparing our go-to-market strategy.

Second, advancing five additional Phase 3 studies of AZK in epilepsy and neuropsychiatry indications, which may help significantly expand the addressable patient population.

And third, advancing and expanding our pain programs, including the Phase 1 studies of XEN1120 targeting Kv7 and XEN1701 targeting Nav1.7 as well as initiating clinical development of an additional Nav1.7 molecule, XEN1720, demonstrating our belief in and the importance of this target.

I'll provide a bit more detail of our recent achievements before passing the call over to Chris, Darren and Tucker. First, we are making great progress towards submitting our NDA for AZK and preparing for launch. I'm happy to share that we've completed a successful pre-NDA meeting with the Food and Drug Administration, and we're on track for a submission later this quarter.

We have continued to share our X-TOLE2 data with HCPs, including two important meetings for the epilepsy community.

First, at the American Academy of Neurology meeting in April, where many of you will recall that the X-TOLE2 results were featured as a late-breaking science abstract and podium presentation.

Then in June, we had another opportunity to present the top line X-TOLE2 results at the Epilepsy Foundation Pipeline Conference. This is attended by HCPs, researchers, industry and patient advocates. Beyond these congresses, our MSLs have been out in the community responding to HCP requests to learn more about our data.

Overall, we continue to hear very positive feedback and excitement for both the X-TOLE2 results including the best placebo-adjusted efficacy in FOS to our knowledge and AZK's differentiated profile, including a novel mechanism of action, rapid onset of effect, once-daily dosing with no titration and no need for dose adjustments with other ASMs. We feel increasingly confident in AZK's potential to become a preferred add-on therapy for the significant number of patients who do not achieve seizure freedom with initial treatment.

Darren will share a bit more on the excitement from the epilepsy community later in the call as well as the progress we continue to make on preparing for the launch of AZK. We also continue to focus on expanding the opportunity for Azetukalner, including through the X-TOLE3 study in FOS to support potential regulatory submissions outside the U.S. as well as the X-ACKT study in primary generalized tonic-clonic seizures to support regulatory submissions for an additional epilepsy indication.

Through our ongoing Phase 3 X-NOVA2, X-NOVA3 and X-CEED studies, we continue to advance our work to broaden Azetukalner's opportunity to neuropsychiatry. There is strong rationale for Kv7 openers in major depressive disorder and bipolar depression, and AZK could deliver a novel mechanism where innovative treatments are urgently needed, especially treatments that may also impact anhedonia and that could offer differentiated tolerability profiles as well as rapid onset of action.

We continue to expect our first Phase 3 MDD study results in the first half of 2027, and we will narrow that guidance as we get closer to the top line readout.

Additionally, we're excited about the progress of our early clinical pipeline for pain. We are nearing completion of our Phase 1 studies for both XEN1701 and XEN1120, and data generated to date supports the initiation of Phase 2 proof-of-concept studies in acute pain for both programs.

We have also recently advanced a second Nav1.7 candidate for pain into a Phase 1 clinical trial. So, this will give us multiple shots on goal for this important pain target. Success in any one of these three novel non-opioid pain programs would meaningfully increase value for Xenon and our opportunity to impact the lives of millions who live with chronic or acute pain.

In line with our continued commitment to epilepsy, we also continue to invest in multiple high-quality candidates targeting various ion channels. This includes our preclinical Nav1.1 program for Dravet syndrome, where we are in IND-enabling studies with the intent of putting the best candidate into the clinic. It also includes our partnered program with Neurocrine, NBI-921355, an investigational selective inhibitor of Nav1.2 and Nav1.6 in development for the potential treatment of certain types of epilepsy, which continues to advance through a Phase 1b study with data expected in 2027.

So, with that, now I'll turn over the call to Chris, who will provide additional clinical and regulatory updates. Chris?

All right. Thanks, a lot. It continues to be a very exciting time here at Xenon as we prepare the NDA for Azetukalner and share our data with the community through scientific exchange opportunities. The interactions our team has had at recent meetings as well as out in the field have been incredibly affirming of our belief in AZK's potential to meaningfully impact the FOS treatment paradigm and provide a therapeutic option with appeal to epilepsy specialists, general neurologists and advanced practice providers alike.

As Ian mentioned, we have completed a productive and positive in-person pre-NDA meeting with FDA, where we gained alignment with the agency on components of the NDA package. We, therefore, remain on track to submit our NDA this quarter as planned and are encouraged by our continued engagement with the agency.

Completing the NDA submission is our team's top priority, and I'm very pleased with our progress and look forward to updating you in the coming months. We also continue our focus on presenting and educating on our exceptional X-TOLE2 data and recently presented at two important conferences for the epilepsy community.

First is a late-breaking science abstract and platform presentation at the AAN meeting in Chicago and second, at the EF Pipeline Conference in Leesburg, Virginia. In these presentations, we highlighted the following key points from our X-TOLE2 data.

One, with regards to efficacy, the study met its primary endpoint and demonstrated what we continue to believe is the best placebo-adjusted response of any pivotal focal seizure study, which was highly significant and outperformed our Phase 2b X-TOLE study. This is even more meaningful when you consider the level of treatment resistance in the X-TOLE2 study population, which had failed a median of five prior antiseizure medications and 60% of those patients were on or had already tried and stopped cenobamate.

Second, we also observed early dose-dependent MPC reductions in weekly FOS from baseline to week 1, reinforcing AZK's rapid and sustained antiseizure activity.

Third, we observed dose-dependent increases in the proportion of patients with at least 75%, 90% and 100% reductions in monthly seizure frequency through the double-blind period as well as evidence of efficacy building over time as evidenced by improvements in the 100% responder rate in the last 8, 6 and 4 weeks of the study.

Fourth, with regards to safety, AZK continued to demonstrate a generally well-tolerated profile, which was consistent with the X-TOLE study. The most common treatment-emergent adverse events across both studies in the AZK dose groups were dizziness, somnolence, headache and fatigue.

With more than 800 patient years of safety and exposure data, we're comfortable that this profile is consistent with other well-tolerated antiseizure medications and with a drug that is potent and active in the central nervous system.

We also had a tremendous opportunity to interact with general neurologists at AAN, where we highlighted our 48-month X-TOLE open-label extension data, demonstrating a 91% reduction in monthly seizure frequency for those treated for at least 48 months. In the same group, almost 40% were seizure-free for at least 12 months and one in four were seizure-free for at least two years.

This is truly remarkable considering the level of treatment resistance in seizure frequency in the overall patient population at baseline.

Now as we look ahead, we're excited to continue to share the AZK data at the 16th European Epilepsy Congress, or EEC, taking place between September 5 and 9 in Athens, Greece and at the Annual American Epilepsy Society or AES meeting taking place December 4 through 8 in Denver.

With regards to EEC, our X-TOLE2 top line results are among the six abstracts accepted and planned for presentation. Also accepted is a new abstract that will highlight the mechanistic characterization of Azetukalner, including Kv7 binding, enhanced channel opening and rational polytherapy potential. In this presentation, we plan to share in vivo data demonstrating the potential additive effects of Azetukalner when used in combination with commonly prescribed antiseizure medications, reinforcing its opportunity to enhance seizure control through the application of rational polytherapy in clinical practice.

Looking ahead, we're planning to have a significant Xenon presence at AES in December and multiple new AZK data presentations, including additional data from the X-TOLE2 study and continued follow-up from the X-TOLE open-label extension study.

Moving on to neuropsychiatry. We continue to enroll patients in our three ongoing Phase 3 studies of AZK for Major Depressive Disorder or MDD and Bipolar Depression or BPD. Depression remains an area where the differentiated profile of AZK, including its novel mechanism of action, rapid onset of action and potential benefits on anhedonia could meaningfully benefit patients in a second category with a much larger patient population who continue to have unmet medical needs.

There's a strong rationale for Kv7 openers in MDD and BPD. Several preclinical and clinical studies, including our own X-NOVA study have shown promising signals of antidepressive effects for the Kv7 mechanism. Additionally, in BPD, specifically, there are genetic links with Kv7, including evidence of Kv7 downregulation.

AZK would deliver a novel mechanism to the MDD and BPD treatment paradigms where innovative treatments are urgently needed, especially those that may also impact anhedonia and that have the potential to offer differentiated tolerability profiles and rapid onset of action.

Our clinical team has made great progress with X-NOVA2 and X-NOVA3 in MDD and X-CEED in BPD. Enrollment remains on track, and we anticipate sharing top line data from X-NOVA2 in the first half of 2027.

Turning now to our pain portfolio. There remains a critical unmet need for non-opioid therapies given the limited efficacy of current options and substantial risk of abuse independency tied to opioids. At Xenon, we have more than 20 years of experience, both through collaborations and our own discovery research on novel pain targets, most notably the sodium channel, Nav1.7, which we view as the best genetically validated pain target.

There's striking genetic data in patients with loss of function mutations that have no ability to feel pain and gain of function mutations have also been identified that drive pain disorders, further underscoring the critical role Nav1.7 plays in pain signaling.

Our Phase 1 study of XEN1701, which targets Nav1.7 continues to advance. Consistent with what we shared earlier this year, we've seen exposures in both the single and multiple ascending dose portions of the study that are predictive of efficacy.

Recall that nociceptive sensory neurons have processes that extend into peripheral tissue as well as behind the blood-brain barrier, such that channels are expressed in both peripheral and central compartments.

Central Nav1.7 target engagement is therefore core to our therapeutic hypothesis. And in this Phase 1 study, we have confirmed central drug exposure via cerebrospinal fluid collection in healthy volunteers. Based on this, we believe we are achieving both peripheral and central receptor occupancies that exceed what is needed for efficacy based on our modeling and on human genetic data.

We're looking forward to completing the Phase 1 study this year. In addition to advancing XEN1701, we've continued our discovery around Nav1.7 given our deep experience with the target and strong belief in its therapeutic potential. We've been working on several preclinical Nav1.7 compounds, continuing to refine our understanding of the biology and to develop novel chemistries.

We're pleased to announce that we recently received CTA approval of XEN1720, which also targets Nav1.7 and have initiated a Phase 1 SAD/MAD study. XEN1720 provides us with an additional clinical candidate that further strengthens our leading position in Nav1.7, an important pain target with compelling genetic validation.

Beyond Nav1.7, our Phase 1 SAD/MAD study of XEN1120, which targets Kv7 also continues to advance. Kv7 modulates neuronal hyperexcitability at multiple points along the pain pathway, and we believe Kv7 potentiators have the potential to treat a range of pain conditions.

This is supported by high levels of Kv7 expression throughout the pain pathway and our preclinical data shows that Kv7 is enriched in the C- and A-delta pain subtypes of sensory neurons. In addition, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain and evidence supports that dysfunction or downregulation of Kv7 activity has been observed in altered pain states.

We've been pleased to see drug concentrations in both the single and multiple ascending dose portions of the study that are consistent with pain reduction in preclinical models. Like Nav1.7, exposure in both the peripheral and central nervous system is likely critical to success for a Kv7 opener in pain, and data so far support that we are achieving Kv7 target engagement in both compartments. We look forward to completing the Phase 1 study this year and continuing to lead on Kv7 science and its application to pain in addition to epilepsy and depression.

With that, I'll turn it over to Darren to provide an update on our path to commercialization.

Thank you, Chris, and good afternoon, everyone. We're making strong progress as we prepare for a potential launch of AZK, our first commercial product and bring an important new treatment option to patients living with focal seizures.

During the second quarter, we continued to execute our commercial build-out, adding key leaders across marketing, sales and field strategy and commercial operations. We've assembled an exceptional team that brings decades of epilepsy experience and successful launch execution. Their expertise, combined with a strong belief in AZK's potential, gives us confidence that we are building the capabilities needed to realize the significant commercial and patient impact opportunity ahead for AZK.

Additionally, we continue to advance our launch readiness and refine our launch strategy informed by deep insights into the treatment landscape, prescribing dynamics and the healthcare professionals we expect to serve in both primary research and in advisory discussions with general neurologists, epilepsy specialists and advanced practice providers, we consistently hear strong enthusiasm for AZK and the recognition of the unmet needs that AZK would address, including compelling efficacy, a well-understood safety profile, rapid onset of action and ease-of-use attributes, all of which could make AZK a go-to add-on therapy.

While we expect epilepsy specialists to lead early adoption of AZK, our market research supports the view that general neurologists can move to AZK sooner than historically has been the case for newly launched epilepsy therapies. To support these efforts, we continue to refine and validate our brand positioning, sharpen our key points of differentiation and develop tailored engagement strategies designed to resonate with specific customer segments.

We also are increasingly focused on introducing payers to Xenon and communicating the potential value proposition of AZK through the lens of the unmet medical need. We've engaged with payers through several key conferences this year, helping to refine our market access strategy and strengthen our overall launch readiness. We also have started to build out our payer-facing field team with the expectation to fill all roles by the end of the year and deploy them in the field early next year.

An important component of the AZK launch will be our distribution approach, and we continue to work to identify, engage our channel partners on the distribution and access side. We also continue to build awareness of Xenon as an emerging leader and committed partner to the epilepsy community between our customer engagement, MSL and patient advocacy teams as well as our presence at congresses, regional meetings, community events, we're making new connections, raising awareness of Xenon and the AZK data we've generated and deepening our relationship each day.

As we move forward, I look forward to sharing more details on our go-to-market strategy and how we plan to bring innovation to the epilepsy landscape with a best-in-class antiseizure medication, enhanced channel and patient services and a strong value proposition for payers. We believe the strategy, capabilities and team we are assembling position us well for a successful launch, pending FDA approval and ultimately, the opportunity to improve outcomes for patients living with epilepsy.

With that, I'll now turn the call over to Tucker to review our financial results and upcoming milestones. Tucker?

Thanks, Darren, and good afternoon, everyone. We ended Q2 with cash, cash equivalents and marketable securities of $1.2 billion, which, based on our current operating plans, provides cash to fund operations into 2029.

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

Overall, it's a very exciting time at Xenon as we continue to build momentum toward our first commercial launch and across our promising pipeline. As we head into the back half of the year, we remain focused on our upcoming NDA submission expected this quarter as well as the advancement of our commercial readiness activities to support a strong launch in FOS.

We are also working to broaden the therapeutic opportunities for AZK beyond epilepsy, and we continue to make progress enrolling our studies in MDD and BPD. We look forward to the readout of our X-NOVA2 study in MDD anticipated in the first half of 2027. And lastly, we're excited about the progress we're making in pain with two Phase 1 studies for XEN1701 and XEN1120 approaching completion and now one additional Phase 1 study for XEN1720 underway and believe Xenon is well positioned to become a scientific leader in the development of novel non-opioid pain therapeutics.

We remain very optimistic about the opportunity ahead as we transition to a fully integrated commercial stage company.

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

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

One quick one on AZK and one on pain. On AZK, maybe just recap for us this FDA pre-NDA meeting and if anything notable came out of it? And then second, on the pain program, maybe talk a little bit about the safety profile you've seen so far. Have you seen any cardiac AEs or anything noteworthy that has been dose-limiting for prior Nav1.7, not Kv7. And then just for Nav1.7, what's the rationale behind advancing a second product now?

Thanks, Paul. Chris, do you want to take the, maybe a little bit of color and commentary on the pre-NDA meeting, and then I'm happy to answer the pain questions.

Sure. Happy to do so, Ian. Thanks for the question, Paul. So we've had the pre-NDA meeting, as mentioned in the prepared remarks, it was an in-person meeting. It was very productive. We continue to appreciate the collaborative nature of the interactions with FDA. We covered the main questions that we wanted to cover with FDA as it pertains to the submission. We continue to believe that we have a very strong package and that overall, it's a pretty straightforward package that we're bringing to the agency. So we're in good shape at this point in time. We're on target to submit this quarter.

Thanks, Chris. And then, Paul, I think I've got all your pain questions down here, but if I miss one, just jump back in. So, as we think about, and your questions were related to Nav1.7, let's just focus on that target for a second.

We had said earlier this year that based on some of the SAD data, we already thought that we were getting or we had profiled that we were getting up to enough exposures that we would see based on our predictions kind of that level of receptor occupancy that should show an analgesic effect. I would say we have even more confidence today because we're really nearing the completion of the study.

So, we've gone through multiple SAD and MAD cohorts. And again, all of our modeling predicts that we're going to have enough exposure to have the receptor occupancy that is being taught by human genetics.

So I think we feel like we're in a really good spot from the XEN1701 profile. There was a new piece of information that Chris disclosed today that I just don't want to miss, which is we've looked at CSF as well. So our hypothesis is that we want to get exposure both in the peripheral nervous system as well as the central nervous system.

We can kind of model that based on our animal work and kind of predict what it's going to be in humans, but we did take extra cohorts just to actually do CSF and to make sure that we were getting central exposure. So I think that's another box that we've checked that, again, feel comfortable that we're getting this global receptor occupancy of the target. We haven't finished yet.

So I'm not going to go into specific safety data. You asked around the cardiovascular effect. Again, today, what we see in the data is that it's a profile that we're very comfortable moving ahead into a Phase 2 proof-of-concept study. So that's taking everything into consideration. So I'm not going to go into very specific details, but we feel very comfortable on what we've seen so far, getting close to completion.

[Technical Difficulty]

Yes. Yes. Once we're complete, then I think we have an opportunity to just give you a little bit more information when we have all of the data unblinded and we can see both the placebo and the active groups.

I think your last one was just around XEN1720 kind of the next molecule. Is that right?

Yes. I don't know if you dropped off, Paul. But yes, I think you had a question just around 1720. So we have taken a second molecule into Phase 1 clinical development. When we think about the Nav1.7 program, and if you go back to the webinar we did almost a year ago, we've made a number of advancements that have overcome some of the limitations we've seen historically.

So those were around selectivity and potency, around protein binding and around the kind of this PK or biodistribution and exposure both in the periphery as well as in the central nervous system. So when we look at 1720, it has some different analysis of those components that we're looking for when we compare it to 1701 and a differentiated chemistry profile.

So I think that this is such a high-value target. We're going to continue to do preclinical work. We're going to continue to advance novel chemistries and move multiple molecules into the clinic just to get more opportunities to see what's the best molecule at the end of the day. Nothing changes with the lead molecule 1701. This is really just around a second molecule that has somewhat of a differentiated profile.

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

Ian, Chris, can you maybe talk a little bit about how you are thinking about what you would still like to get out into the public domain about the profile of Azetukalner in your Phase 3 X-TOLE2 trial and what the specific publication strategy looks like? I know there's a small epilepsy conference at the end of the year, but any other color you'd give us?

Thanks, Tessa. I'm happy to start, and Chris, you can add. So I think we've given a fair bit of information on X-TOLE2 already. So you've seen top line data. You've seen all of the key efficacy endpoints, including some that were outside of the statistical hierarchy. And you've seen kind of the broad safety profile. So we were able to show those data at AAN at the EF pipeline. We're going to have more data in Encore at EEC and then more, as you mentioned, at AES.

If we look back to the X-TOLE data, we looked at certain different analyses that we're still going through, different seizure subtypes, different types of patients. So all of that work kind of ongoing, and you'll see that over time.

The publication strategy is critical. So we have peer-reviewed publication of the X-TOLE and X-TOLE OLE data, and we are working hard to get the peer review of the X-TOLE2 data as well because we think that's really going to be important for the epilepsy community that we not only presented at congresses, but it's also peer reviewed.

Chris, anything to add on kind of details on some of the other analyses you're looking at?

In the prepared remarks, we had talked about the fact that 60% of patients in X-TOLE2 were either on or had failed cenobamate. And so you may see data on that down the road.

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

Congrats on the progress this quarter. This is Matthew Barcus on for Andrew Tai. Now you provided more color today on the progress of your Phase 1 SAD/MAD studies in pain. Can you just remind us like what additional data you plan on sharing later this year for those programs? And then at that time, will you be prepared to delineate which acute pain indications you'll be pursuing next for these studies as well? And then our understanding is that X-CEED started maybe 6 to 8 months after X-NOVA2. And with X-NOVA2 data in the first half of next year, how should we be thinking about the interim look from X-CEED, if you have any color on the timing for that?

Sure. I think Matt, I got them all. I'm happy to kind of walk through time lines and the pain stuff. Tucker, do you want to do the X-NOVA timelines? And then I'll, why don't I jump in on the data from the pain programs and the types of acute pain PoC studies?

Sure. So we've said on the call in the press release is that we'll have the X-NOVA2 data in the first half of next year. We haven't provided any guidance yet on either X-NOVA3, right, the second Phase 3 study in MDD. And I think you asked about the X-CEED study in bipolar depression. And again, as you said, both of those started after X-NOVA2, but we're still not far enough along in the enrollment curve to provide an updated time line for when those might read out, but they'll certainly be after, obviously, the first half readout for the MPD study, X-NOVA2.

And then on the pain stuff, yes. As I mentioned in the first question, we're getting close to completion of those Phase 1 studies, then we'll have the complete data package and then we can really talk about what we provide publicly. These are competitive targets. And so I think we may be balanced in terms of how much information we provide publicly. But I think we'll be able to at least walk you through kind of our decision process on why we believe we have enough exposure and the appropriate safety profile to move into a proof-of-concept study.

The proof-of-concept studies are still being designed right now for both XEN1120, the Kv7 drug as well as 1701, the Nav1.7 drug, but these will be acute proof-of-concept studies, so things like a bunionectomy or an abdominoplasty study. We'll have the final trial designs for those in the coming months. And I think part of that rollout, we'll be able to talk about the specific indication in the acute pain proof of concept, but importantly, the trial design as well.

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

My question is on the anticipated Phase 2 proof of concept in acute pain. How are you thinking about design right now? If we look at the path Vertex, they went head-to-head with low-dose oxycodone and placebo, but restricted rescue to ibuprofen, the TiVo program which was published the other week. We also went against low-dose oxycodone and placebo, but allowed use as Percocet as rescue and maybe because of Percocet's efficacy showed a pretty disparate result. Do you see any better value in one versus the other design in terms of using an opioid as a rescue? Or are you thinking about something completely different?

Thanks, Brian. I'm happy to start and then, Chris, if you've got anything to add. So Brian, we're not quite there yet, as I just kind of answered on the last question. I know you've been thinking about this a lot and you and I have had conversations about just the right design for a Phase 2 proof of concept.

I'll take it a step further. You're looking at both what active comparators as well as kind of rescue. We also have to think just about how many active dose arms of the experimental medicine as we kind of really understand dose range finding and identifying doses to move forward in the future clinical development. So there's a number of things that we kind of want to answer within that Phase 2 proof-of-concept study. We're still in the design phase. I don't think that there's going to be anything in this study that's going to be unusual.

So I think it would be reasonably standard. But as you said, a few different sponsors have taken slightly different approaches here. But I think we're only a few months away being able to kind of walk you through what the trial design is and why we've made certain decisions in the trial design.

Chris, anything to add right now from your perspective?

I'll just say that we're following the field closely. And of course, the studies that have been done recently will serve as guides for what we do eventually. The advantage of using the opioid as a rescue is that you can show data with opioid sparing. So we're looking at that, but it's still in the works, Brian.

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

On the progress. Maybe first on depression. Can you remind us the powering assumptions on HAM-D for X-NOVA2? And maybe any changes in the baseline depression severity versus the patients that you were enrolling for X-NOVA? And then for AZK, this adoption by general neurologists seems to be a unique exciting opportunity. Can you go into a little bit more detail on when you expect general neurologists to start adopting the therapy and maybe specific education efforts you can do to make sure they have a good initial experience?

Thanks, Joe. Okay. Why don't we do, I'm happy to start just on the powering assumptions. And then, Chris, why don't we broaden that out? I mean, Joe's question is just on the HAM-D entry criteria from Phase 2 to Phase 3, but I think it might be helpful just to walk through a bunch of the changes that we've made from Phase 2 to Phase 3 because I think we learned a lot in the X-NOVA study that we're applying into X-NOVA2.

And then Darren, jump in on your thoughts on general neuros and both adoption, but also, I think some of the profile of AZK that is really the feedback you're getting from the general neuro interaction, and I know you've done some ad boards on the general neuro side as well.

But Joe, just to kick off on the HAM-D17, so we're appropriately powered for a Phase 3 study. So think about that kind of 90% for about a 2, 2.5 point separation in that range based on our expectation in terms of standard deviation. So I think we have really good powering in the study. It's 450 subjects. X-NOVA2 and X-NOVA3 are the same, meaning they're designed exactly the same as monotherapy studies, but I think well powered to see that separation between active and placebo.

Chris, do you want to go through the X-NOVA to X-NOVA2 changes?

Yes, sure. Happy to. So obviously, one of the things that we changed is we're including a larger sample size, so the power is higher. We decreased the number of active treatment arms from two to one, which in general, saves you about one point on the placebo response. So that's favorable. We increased the cutoff a little bit so that we're collecting a little bit more of a slightly more impaired population with more depressive symptoms in Phase 3 relative to Phase 2.

We're focusing on adherence by using an app that captures adherence and allows for real-time feedback for subjects who aren't adhering. And then just overall, we're scrutinizing patient randomization even closer in Phase 3 than we were in Phase 2, using the safer criteria and then keeping a real close eye on the data in real time to make sure that there isn't anything unexpected happening.

But yes, we don't share baseline characteristics as the study is unfolding. As you know, every patient that's added changes that. So we'll share that once the study is complete.

Yes, Joe, regarding the general neuro, yes, we think it's a pretty exciting opportunity. If you look historically at the most successful antiseizure medications, Kv those were really embraced by the general neurologists. And we spent a lot of time understanding that history, but also then where does Azetukalner fit in with its unique characteristics.

And Joe, you know better than anyone. It's a novel mechanism. We have ease of use attributes, really stellar safety and efficacy profile. So we've talked to a lot of general neurologists about this. And as Ian highlighted, through advisory boards and other one-on-ones. And when you couple the efficacy safety along with our open-label extension seizure freedom data, it really is a package that they're really compelled by.

I think we have this opportunity to do that. We're doing a lot of work now kind of targeting, understanding where we're going to have our focus at launch. And so as you've noted, kind of how do we expedite that utilization, that's something we're tremendously highly focused on. The other piece of it is also how do you use the expression, make it a good experience for them.

I think this is where we're trying to be and thinking about really being a little bit disruptive or innovative here because I think traditional antiseizure medication launches have gone a certain distribution route, have not really assisted the general neurologists in different things like prior authorization and helping patients get through obtaining the therapy. And also on the patient side, where they may show up at a retail pharmacy, for example, and really struggle there.

So we're really evaluating a service that we can wrap around both the general neurologists and the patient to make that experience a good one out of the gate. We think that based on our research and discussions, those have been some of the barriers that they've encountered and that we hope to overcome. And so again, we still have a lot of work to do and over the next several quarters, but I think that we're in a really good position to really bend the curve if we can with the general neurologists.

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

Two for me. First, can you characterize your payer conversations and just the latest views on the potential pricing benchmarks for Azetukalner and receptivity to potential premium pricing, just given all of its profile advantages? And then secondly, how might your commercial strategy be affected if there looks like there could be a Kv7 focal onset seizure fast follower competitor emerging?

Yes. Well, yes, both of them. Maybe I can start on a little bit, Darren, I'll start on the competitive landscape and then you can go into kind of the specific question from Brian on kind of a fast follower as well as on the payer stuff because I know you guys have done a huge amount of work already.

Yes, Brian, look, there's more than 20 antiseizure medicines available. Patients do kind of cycle through drugs. We do see drugs. If you look at like sodium channel inhibition, multiple drugs of the same mechanism. And as Darren just talked about in the last answer, you have a drug like Vimpat, which is the same mechanism and did incredibly well, and there were attributes of that medicine that I think were really important specifically with the general neurologists. I think where we are today is we've set an incredibly high bar. So obviously, we will be the first Kv7 drug on the market.

I think we have an incredible profile. And when you look at the four doses on label that we're talking to the agency about, you've got a clear dose response. You've got 10 and 15 milligrams that show separation, but quite frankly, have a really benign safety profile, very similar to placebo, a little bit higher in dizziness at the 15-milligram dose.

And then if you go up to 20 and 25 milligrams, you get the opportunity in that dose response to see even better efficacy and seizure reduction. So, I think we've set an incredibly high bar, but we do see in the epilepsy space that this isn't a zero-sum game that multiple molecules can be successful together and even multiple molecules within the same mechanistic class. But I really like the setup for where we are right now.

But Darren, happy for you to add your comments to that and then specifically on the payer side.

No, I think you've covered it on the potential other mechanisms. So, Brian, regarding payer and price, as I remind folks, by the time we're approved and commercializing, it will be almost a decade since the last focal onset seizure medication was approved. And so regarding the payer audience, our kind of our initial discussions really anchor around reeducating them about, A, focal seizures and B, most importantly, the unmet medical need.

When we put the product profile in front of them, they're very impressed. They understand the difficulty in managing these patients, all the antiseizure medications that patients cycle through. And quite frankly, with Azetukalner and the new mechanism of action are excited. So, I think from that perspective, and we'll continue that dialogue with them as we get closer to launch.

But I think it leads to the second part of your question is, okay, what's the value then that they perceive of this new antiseizure medication. So we have kicked off our pricing work. It's still ongoing. I think that I would characterize it that if you look at where we are today when we launch, the efficacy and safety that Azetukalner provides, meeting still a tremendous unmet medical need.

We feel early days that there is an opportunity to ensure we get the value out of Azetukalner, while also, though, ensuring that patients can access the drug and physicians feel confident writing it. So it's one of these things. We'll assemble all that data. And when we ultimately launch it, we'll price it, but we'll have a good idea as we learn more as we continue our work.

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

Just a confirmatory one. In the pre-NDA meeting, did you confirm that you've got a sufficient amount of data for review in some of the lower doses that I think you're going to go on label with alongside the 25 milligram. That's the first one.

And then the second one is actually on the X-CEED trial in bipolar. I know you're certainly getting patients in that have depressive episodes on type 1 and type 2. The type 1 patients, like there is always a reasonable chance that there may be some mania in the trial and you have a year open-label extension. How are you dealing with a patient that may experience mania? Do they drop out of the trial? Or do they go to like rescue medications like cariprazine?

Chris, these are, I think, all for you. Do you want to start with the pre-NDA and just our plan for four doses on label. Obviously, Myles, as you know, I think that's kind of where the question is coming from is that we have 10 milligrams was in the X-TOLE study, 15 in X-TOLE 2, 20 in X-TOLE and then 25 in both. So we do have different safety exposures at different doses, but obviously, a lot of open-label data at these kind of higher doses that would provide that coverage. But Chris, provide your perspective there. And then if you can go into the bipolar in terms of the patients that cycle into mania as well.

Yes. I mean, Myles, thanks for the question. A lot of this stuff will be dealt with in the review, but there were no concerns from the agency specifically about inadequate exposures in any way. So the details of that will be kind of discussed as we kind of go through the review process. But we think we have a pretty robust package for all these different doses that supports getting all four doses approved.

I mean the 10-milligram dose was studied in a double-blind study, and it did separate from active, and it showed a really quite remarkable tolerability profile similar to placebo. So we think we're in pretty good shape as far as all the different doses go. It remains to be seen. We'll have to see how the review goes.

The other topic, X-CEED BPD. I mean, that's starting to get into details about the protocol, but I'll just share with you that in general, most protocols deal with mania by defining it with a certain cutoff on the YMRS. And then if that's met, patients are discontinued. So we're taking kind of a standard approach to that.

Your next question comes from the line of Paul Choi with Goldman Sachs.

This is Kevin Strang on for Paul. Just had a quick one on MDD. You talked about potential differentiation for AZK and sort of the rationale for Kv7 there. Can you just sort of book in what specific efficacy signals you might be looking for or thresholds when that trial reads out next year?

Sure. I'm happy to start. And Darren, maybe you can provide your perspective commercially as well. Kevin, in terms of the work that we've done with prescribers is obviously, there's a significant medical need here and they want different options for their patients. And so drugs that are approved, i.e., they've shown statistical data in clinical development, what we find it's less around a specific separation on HAM-D17 or MADRS or even kind of drug to drug, but much more about the profile of the patient and what therapy may be prescribed. And as we've talked a lot, the feedback that we're getting is where AVK could really stand apart is a novel mechanism.

So most of these patients will have exposure to standard SSRIs or SNRIs atypicals, but it would be exposure to a novel mechanism. It would have the opportunity, what we've seen for this mechanism is to have an impact on anhedonia, which other mechanisms don't seem to have that impact. And so we are looking that as a key secondary endpoint in the study, looking at the SHAP scale.

It does, what we see both across the epilepsy program as well as the psychiatry program is the rapid onset of effects. You do see the separation, whether it be in depression or epilepsy between active and placebo. at week 1. And so for, again, some of the mechanisms in depression that takes some time to work, this would work more quickly. And then a different tolerability profile. We don't, to date, haven't seen any notable sexual dysfunction or weight gain.

So I think it's the kind of that package that the prescribers are talking to when we do DPP and market research to get the feedback and less around a specific efficacy measure. But Darren, I'm happy for you to provide your perspective as well.

Ian, I think you went through all the kind of the attributes other than it is still a tremendous unmet need. It's a big market, roughly 22 million Americans, a little bit more than half are treated with some kind of pharmacotherapy and one out of three of those are not adequately managed. So, and would be available for a branded and particularly a novel mechanism, which, again, most of these are SSRIs. So it's really, really a great opportunity. And there is a lot when we go talk to docs and do some market research, a lot of excitement around a new mechanism in this space.

Your next question comes from the line of David Hoang with Deutsche Bank.

So I just wanted to ask about some of these two questions. So for focal epilepsy for the adolescent population there, what additional work would be required to get a label and extend down to adolescent patients? And then to what extent is the PGTCS indication and label important for AZK's overall profile? And what would that contribute to the overall revenue opportunity?

Thanks, David. Chris, why don't we start with just the our pediatric plans, maybe I know David's question was around adolescents, but we could probably just expand to kind of the pediatric development that we've negotiated with FDA and EMA. And then Darren, can you address the patient population for PGGCS and how you see that commercially? Yes, sure. Chris, to start?

Yes, sure. So we have agreement on the pediatric plans for focal onset seizures with both FDA and EMA, as Ian has said. For those of you who aren't familiar with that, you're basically capturing data that pertains to safety and PK, not efficacy. And you sort of start at the older patients, the adolescents and then work your way down to patients who are younger over time based upon your being comfortable with the safety and the PK data. So we have all that agreed upon. That's exactly what we're intending to do to get sort of the extrapolation for the label down to a younger age than 18, which is what the studies are currently studying at least in focal onset seizures. Darren?

Yes. So regarding focal and then generalized, just to step back, there's roughly three million adults or folks with epilepsy in the U.S., about 1.8 million have focal and then roughly almost another one million have generalized seizures.

From a development perspective, if you look at the most successful ASMs that I referenced earlier, focal is the entry and then you follow on with a generalized. I think in the marketplace, you do get some use in the generalized. But I think our development plan fits nicely with, if you think about Azetukalner being a broad-spectrum antiseizure medication, having that supplemental label expansion will be quite helpful, particularly down the road for general neurologists who want to treat their patients and want to have the comfort that it can cover a broad spectrum.

So it's important. I know the development plan is going well. There's a lot of excitement for Azetukalner in this space, and it will be very beneficial for us.

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

One question on X-TOLE3, just as this is enrolling, I think you've mentioned this has expanded to include Japanese patients. I guess what are you seeing in terms of baseline characteristics? Or what are you expecting in terms of baseline characteristics? Any differences that we should expect relative to X-TOLE2? Really just asking if the different geographies being included are associated with maybe different treatment paradigms. And of course, could that lead to differences in these characteristics and maybe a different effect on the drug?

Thanks, Ben. Chris, do you want me to start and then you can jump in as well. So Ben, I wasn't sure if you were referring to do we expect with the inclusion of Japanese subjects whether the baseline characteristics would change or just generally X-TOLE3 versus X-TOLE2. Was there something specific on the Japanese side you wanted to understand?

No, more just generally.

Okay. Yes. I mean, as the study, I'll start and then Chris can provide additional detail. As these studies are ongoing, we don't comment and we didn't on X-TOLE or X-TOLE2 on baseline characteristics as we go along.

Similarly, I think Chris answered this question as it relates to a different question earlier is that these things are changing all the time. Each patient has an impact on that. So we're not going to go into the specific details. As a reminder, X-TOLE2 and X-TOLE3 are an identical protocol. So by that definition, we expect a similar patient population in both. Once we unblind the data and we're done, would they maybe be slightly different depending on the jurisdiction and different sites? Yes, they might be. But I think generally, the expectation is that the patient baseline characteristics would be somewhat similar to X-TOLE2.

Chris, anything to add to that?

Well, just that the inclusion/exclusion criteria were pretty similar between X-TOLE and X-TOLE2 and the baseline characteristics were nearly identical. So Ben, that's sort of the direction that we think we're heading in, but it's changing over time.

Okay. So you're not really expecting major differences in sort of background medication with XCOPRI and other medications that can maybe influence the drug profile?

Well, from Phase 2 to Phase 3, the concomitant use of cenobamate went up because its usage went up within the medical community. But X-TOLE3 and X-TOLE 2 have been run in parallel. So I don't predict any significant differences between those studies.

That concludes our question-and-answer session. I will now turn the conference back over to Mr. Ian Mortimer for closing remarks.

Thanks, operator, and thanks to everyone for joining us today. If we didn't get a chance to get to your questions during the allotted time, happy to reach out directly and connect. And we look forward to continuing to provide updates as we advance our programs and deliver on important milestones through the remainder of the year. So operator, we can now end the call.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Half of the 1.9 million?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Great. Thanks so much for having me, Jason.

All right.

Thank you.

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

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

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's First Quarter 2026 Financial and Operating Results. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer. After completing our prepared remarks today, we will open the call up for your questions.

Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans and current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates, the strength of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, including the anticipated filing of INDs and NDAs, the timing and results of those filings and our interactions with regulators, our ability to successfully obtain regulatory approvals, anticipated timing of top line data readouts for our clinical trials of azetukalner and other candidates and our expectation that we will have sufficient cash to fund operations in 2029.

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

I'll now turn the call over to Ian.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To round out my remarks, pain continues to be an area of growing focus, and we're looking forward to completing our first-in-human studies for our novel pain programs this year. There remains a strong desire for non-opioid pain therapies given the limited efficacy of current options and substantial risk of abuse and dependency tied to opioids. We know that analgesics can act along multiple different points of the pain pathway and interrupt the pain signal on its way to the brain, and we believe in the potential for Nav1.7 inhibitors and Kv7 potentiators to play important roles at multiple points in this pathway, including in the initial transduction of pain stimuli into pain signals, the transmission of those pain signals along nociceptive neurons and the relay from peripheral sensory neurons to spinal cord neurons in the central nervous system.

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

Kv7 is also a compelling pain target to modulate neuronal hyperexcitability at multiple points along the pain pathway. And we believe Kv7 potentiators have the potential to treat a range of pain conditions. This is supported by high levels of Kv7 expression throughout the pain pathway and our preclinical data shows that Kv7 is enriched in the C and A delta subtypes of sensory neurons. In addition, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chris, do you want to address the regulatory interaction?

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

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

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

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

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

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

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

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

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

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

No, that was great.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Your next question comes from David Hoang with Deutsche Bank.

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

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

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

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

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

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

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

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

And Chris, you want to talk on the monotherapy?

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

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

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

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

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

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

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

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

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

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

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

Good morning. Thank you for joining us on our call and webcast to review the top line results from the Phase III X-TOLE2 study in focal onset seizures. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer. After completing our prepared remarks today, we will open the call up for questions.

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

I'll now turn the call over to Ian.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ian, I'll pass it back to you.

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

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

Operator, we'll turn it over to you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes, that's right, Paul.

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

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

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

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

But Chris, any specific comments from you on variability?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chris, on dose reductions?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I think you covered it.

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

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

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

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

Chris?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Well said.

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

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

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

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

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

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

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

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

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

Great. Thank you.

Thank you.

Thanks, Tess. Thanks.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ian, I'll pass it back to you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Operator Instructions]

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

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's third quarter 2025 financial and operating results. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, our Chief Financial Officer.

After completing our prepared remarks today, we will open the call up for questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans in current and anticipated indications addressable market regulatory success and commercial potential of our and our partners' product candidates; the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, including the anticipated filing of INDs and NDA, the timing and results of those filings and our interactions with regulators; our ability to successfully obtain regulatory approvals, anticipated timing of the top line data readout for our clinical trials of azetukalner and our expectation that we will have sufficient cash to fund operations into 2027.

Today's press release summarizing Xenon's third quarter financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investors section of our website at xenon-pharma.com and filed with the SEC and on SEDAR. I will now turn the call over to Ian.

Great. Thank you, Colleen, and good afternoon, everyone. Thanks for joining us on our call today. We're excited to share the considerable progress we have made over the past quarter as we remain focused on our 3 critical priorities. First and foremost, completing our Phase III X-TOLE2 study of azetukalner for the treatment of focal onset seizures, the top line data readout in early 2026, followed by the filing of our first NDA for the approval of the azetukalner in the U.S.

Second, broadening the therapeutic opportunities for azetukalner beyond epilepsy, with potential neuropsychiatric indications where we have identified strong preclinical, clinical and genetic evidence supporting the development in major depressive disorder and bipolar depression.

And third, expanding our pipeline through the advancement of our promising earlier-stage Nav1.7, Kv7 and Nav1.1 ion channel programs with recent progress of our novel Nav1.7 and Kv7 modulators moving into Phase I studies. I will focus most of my comments on our azetukalner, or AZK, Phase III epilepsy program, and Chris will provide additional details across our clinical stage portfolio. As a reminder, AZK remains the only Kv7 channel opener and the only ASM in development that is backed by long-term efficacy and safety data from clinical studies of patients living with epilepsy.

Having demonstrated a highly compelling placebo-adjusted efficacy in focal onset seizure patients in our Phase IIb X-TOLE trial, and durable and sustained efficacy over time for our open-label extension study. with greater than 800 patient years of exposure and safety data.

As we disclosed in today's press release, the final patients in our X-TOLE2 study have completed the baseline period. and all patients have now been randomized. The final number of patients randomized is 380, which is a significant milestone, and we remain on track for top line data readout in early 2026.

As a reminder, X-TOLE2 was designed and powered to randomize approximately 360 patients. So we are very pleased to have randomized more than the target in the study design. This will result in good power across the critical endpoints in this study. From the outset, we have prioritized working with high-quality, experienced clinical sites to maximize study success while diligently monitoring key metrics throughout the study. These metrics are tracking as we expect and as we disclosed previously, patient baseline demographics and the open-label extension rollover rate are consistent with our successful Phase IIb X-TOLE2 study. Therefore, we remain confident in X-TOLE2 and share the epilepsy community's excitement as we progress towards top line data readout.

Two topics that we often get questions on with respect to X-TOLE2 are the final steps between now and top line data as well as our expectations going into this important readout, so I'm happy to address both of these topics. As I mentioned, the final patients in X-TOLE2 have recently been randomized. That means all patients have completed their 8-week baseline period and the randomization visit. These final patients are now in the 12-week double-blind portion of the study.

For those patients who complete the double-blind portion, they have an opportunity to enter the open-label extension. The OLE rollover rate has been high in X-TOLE2, consistent with X-TOLE, where we saw greater than 95% of patients roll over to open label. For those patients who don't enroll in the OLE, there is an 8-week safety follow-up visit. Therefore, the final timing of the top line data will be determined based on the last few patients and whether they enter OLE.

After the final patients have completed the double-blind period, we will finalize data cleaning and lock the database, complete the statistical analysis and medical review and be ready for top line data relates. We will be in a position to narrow guidance about the specific timing for top line data in the coming months. We are optimistic for a positive outcome, and we believe that X-TOLE2, together with the strong results from X-TOLE will serve as the basis for a new drug application for AZK in focal onset seizures. As we prepare for the X-TOLE2 readout, we have completed a detailed review of prior FOS studies, and we find that there is high reproducibility of results from Phase II to Phase III.

ASMs that have strong efficacy results in earlier studies demonstrated similar positive results in subsequent Phase III studies. Although there is some reduction in effect size, which is not unusual when moving from Phase II to Phase III. Over the last 20 years, anti-seizure medicines that have been approved in adult FOS in the U.S. have shown a placebo-adjusted seizure reduction percentage ranging from the teens into the low 30s. Interestingly, some of the more successful ASMs, including Vimpat, are on the lower end of this range and [indiscernible] the drugs on the higher end of the range had other challenges, either around tolerability or an onerous titration or DDI profile. This reinforces what we consistently hear from physicians. Although efficacy is an important component, the overall profile of the ASM drives prescribing decisions to address a broad range of unmet needs for their patients. And it is this overall profile where we believe azetukalner is differentiated and has a compelling set of attributes.

At launch, we believe AZK will be an only in-class Kv7 mechanism of action with strong short- and long-term efficacy, QD dosing with no required titration, no adjustments for DDIs, the potential for mood benefit and an overall favorable safety and tolerability profile. It is this profile that we believe will drive adoption and commercial success. So again, we have high confidence, and we expect that a positive X-TOLE2 readout, combined with the impressive efficacy from our X-TOLE study will form compelling profile supportive of our NDA submission. We remain excited as we look forward to the potential of bringing an important new medicine to the epilepsy community. So I'll now turn the call over to Chris, who will share more details on our clinical development programs across epilepsy, depression and pain. Chris, over to you.

Okay. Thanks a lot, Ian. I'll begin with an update on our epilepsy program. As Ian already said, we're really pleased to have completed randomization in our Phase III X-TOLE2 clinical study of azetukalner with a total of 380 patients, which exceeded our original goal of 360. Our team's focus is now on completing the study to deliver top line data in early 2026, with the shared goal of the positive impact we could have by providing a new treatment option for these patients. We're also placing a great deal of effort into the other 2 studies of azetukalner in epilepsy including our Phase III X-TOLE3 study in focal-onset seizures and our exact study in primary generalized tonic chronic seizures.

While we advance our various studies in epilepsy, we are also focused on scientific exchange and education around the profile of azetukalner with health care providers. This fall, we had a strong showing at the International Epilepsy Congress, or IEC, in Lisbon, where we had an opportunity to present 4 posters while meeting with various health care providers as we highlighted the 36-month data from the ongoing X-TOLE open-label extension study of azetukalner in patients with focal onset seizures, which demonstrates sustained monthly reduction in seizure frequency, impressive seizure freedom rates and a consistent adverse event profile suggesting long-term efficacy and tolerability of azetukalner. We also presented data from our X-TOLE study showing the efficacy of the azetukalner and certain focal onset seizure subtypes as well as presenting a targeted literature review outlining the comorbidity burden in focal onset seizures.

In addition to these clinical presentations, we presented findings from our early-stage Nav1.1 program with data from preclinical models specific to Dravet syndrome. The energy at the meeting was high and excitement continues to build around the long-term data and continued scientific evidence generation.

Looking ahead, we continue to generate data from our azetukalner open-label extension study and will present new 4-year long-term data at the upcoming annual meeting of the American Epilepsy Society, or AES, in Atlanta early December. AES is a critical [indiscernible] for us to engage with the epilepsy community and Xenon is currently an emerging leader in the field. We look forward to significant scientific engagement. With 7 abstracts accepted for presentation, we're looking forward to showcasing a number of presentations, including the updated long-term data from the ongoing azetukalner open-label extension in focal onset seizures, study centered around depression and the impact on epilepsy patients as well as preclinical data from our Nav1.1 program.

In addition, we look forward to interactions at our various booths, one-on-one meetings with physicians facilitation of ongoing scientific exchange through a dedicated scientific exhibition and symposium. So in summary, considerable momentum is building in our azetukalner epilepsy program with important milestones in the near term with the presentation of the 48-week open-label extension data at the American Epilepsy Society followed by our X-TOLE2 Phase III readout in early 2026.

Now turning to Xenon's efforts to expand azetukalner's use into neuropsychiatry, an area where we believe the differentiated profile of azetukalner could really benefit patients. We hear from physicians that they are interested in new therapeutics with novel mechanisms of action, potential benefits on anhedonia, repeating of onset along with a potentially differentiated tolerability profile.

Our clinical development teams have made great progress with X-NOVA2 and X-NOVA3, 2 of our 3 planned Phase III clinical trials evaluating azetukalner, in patients with major depressive disorder, which are underway and enrolling patients. In addition, EXCEED, the first of 2 planned Phase III clinical studies evaluating azetukalner in patients with BPD-1 and BPD-2 depression is also underway. Effective treatments for depression in bipolar disorder of limited and many patients are non-adherent due to side effects and other factors. There remains a significant unmet medical need for safe and effective therapies to treat patients with bipolar depression and the physicians that we have spoken with are keenly interested in sections differentiated profile.

Beyond support and physician feedback, a number of key factors informed our decision to expand our clinical development of azetukalner into bipolar depression, including an in-depth review of the existing literature outlining genetic links between BPD and Kv7. Evidence of Kv7 down regulation in BPD as well as clinical studies that explore the use of Kv7 potentiators in depression, including results from our own proof-of-concept study in MDD.

We've also generated preclinical data showing an antidepressive effect of azetukalner. Considering the current treatment landscape, azetukalner's novel selective Kv7 mechanism of action potential benefits on anhedonia, wrapped into onset of effect and differentiated safety profile are particularly attractive in PPD.

As a reminder, our EXCEED trial, is a multicenter, randomized, double-blind, placebo-controlled clinical trial to evaluate the clinical efficacy, safety and tolerability of 20 milligrams of azetukalner administered orally with food over the 6-week double-blind period. as monotherapy treatment in approximately 400 patients with Bipolar-1 or 2 depression with an opportunity to increase the sample size to 470 patients based on an interim analysis.

The primary efficacy endpoint is the change from baseline in the modular score at week 6 in patients who received azetukalner as compared to placebo. Upon completion of the double-blind period, eligible patients may enter an open-label extension study for up to 12 months. We're incredibly excited about the potential of azetukalner and its Kv7 mechanism and neuropsychiatric indication such as MDD and BPD, and I look forward to providing updates as we leverage azetukalner's pipeline and a mechanism potential across multiple streams of late-stage clinical development.

Looking at our early-stage programs. As Ian mentioned, both of the lead molecules in our Nav1.1 and Kv7 programs, XEN1701 and XEN1120, respectively, are now in Phase I first-in-human studies in healthy volunteers. In October, we hosted an investor webinar focused on Nav1.1 and Kv7, which has garnered much interest. We received insightful questions about our approaches, including our focus on leveraging mechanistic insight, especially around ion channel function to target pain at its source and develop precision therapies that can address both the complexity and chronicity of pain.

When we engage directly with clinicians, we hear a strong desire for opioid-sparing therapies that can meet the everyday realities of pain management without compounding the problem. Physicians recognize the limited efficacy of current options and remain concerned about the substantial risk of abuse and dependence tied to opioids. Even when opioids are used appropriately, their long-term safety profile is far from ideal. Chronic NSAID usage can also be problematic for different safety and tolerability issues that may arise.

So these conditions are looking for alternatives that are both effective and well tolerated over the long haul. And importantly, they're interested in ion channel blockers as a potential transformative class of therapies. We know that analgesics can act along multiple different points of the pain pathway and interrupt the pain signal on its way to the brain. This is why we are excited about the potential for Nav1.1 inhibitors and Kv7 potentiators as these channels play important roles at multiple points in the pain signaling pathway, including through the initial transduction of pain stimuli into pain signals, the transmission of those pain signals along nociceptive neurons and the relay from peripheral sensory neuron to spinal cord neurons within the central nervous system.

Starting with Nav1.1, we believe it is the best genetically validated pain part with striking genetic data in patients with loss of function mutations who have no ability to feel pain. Gain of function mutations have also identified -- have been identified that drive pain disorders, further underscoring the critical role now Nav1.1 plays in pain signaling. Our lead Nav1.1 inhibitors are CNS penetrant to enable global inhibition of Nav1.7 to better mimic the human genetics. They also demonstrate good free fraction and tissue distribution to achieve high levels of target engagement. And lastly, we have identified molecules that have excellent potency and selectivity to safely achieve target therapeutic levels of Nav1.7 inhibition. We believe we have solved for some of the critical limitations of prior Nav1.7 compounds and continue to build a strong pipeline of optimized Nav1.7 inhibitors for development in pain.

With our long history with Nav1.7 and our deep ion channel drug discovery expertise, we are well positioned to deliver a novel and differentiated Nav1.7 compound profile into the clinic, one that has never been tested before.

Kv7 is also a compelling pain target to modulate neuronal hyperexcitability at multiple points along the pain pathway. And we believe Kv7 potentiators have the potential to decrease neural hyperexcitability for the treatment of a range of pain conditions. This is supported by high levels of Kv7 expression throughout the pain pathway and our data shows that Kv7 is enriched in the C and A delta P subtypes of sensory neurons. In addition, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain.

Additionally, evidence supports that dysfunction of down regulation of Kv7 activity has been observed in altered pain states. And lastly, a clinical compound previously approved for the treatment of pain, flupirine has a mechanism of action that involves potassium channel opening, providing further validation of this approach.

So in summary, we're excited to have both XEN1701 and XEN1120 now in Phase I first-in-human studies in healthy volunteers. And our goal is to initiate Phase II proof-of-concept studies next year and we'll provide more details as we get closer to those important milestones.

I'll now turn the call back to Ian so he can cover our Nav1.1 [indiscernible]. Ian?

Great. Thanks, Chris, and thanks for sharing the significant momentum across our pipeline. We are proud of our extensive knowledge and development expertise in potassium and sodium channel therapeutics as well as the focus and investment in pain, neuropsychiatry and epilepsy. Rounding out updates with our Nav1.1 program, which continues to progress as we generate preclinical data that suggests targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet syndrome. Data shows that the dosing with an orally available small molecule CNS penetrant and highly selective Nav1.1 potentiator suppressed induced seizures and improved motor performance supporting the potential for improvements in Dravet patient motor function. Further, in these animal models, chronic dosing suppressed spontaneous seizures protected against sudden unexpected death in epilepsy, or SUDEP, and increased long-term potentiation, a potential cellular correlate of learning and memory. We anticipate presenting preclinical data from this program at AES and expect that a lead Nav1.1 candidate can enter IND-enabling studies later this year.

Finally, also coming out of our lab, a promising selective dual inhibitor of Nav1.2 and Nav1.6 sodium channels is now in a Phase I study as part of our collaboration with Neurocrine Biosciences. Neurocrine has guided that this first-in-human study will evaluate safety, tolerability, pharmacokinetics and pharmacodynamics of the investigational compound, mbI-921355 and in healthy adult participants to support its development for the potential treatment of certain types of epilepsy. As our diverse pipeline of early-stage truck candidates continues to mature, I'm incredibly proud of the considerable progress we are making across multiple programs targeting ion channels.

Before offering some concluding remarks, I do want to take a moment to introduce Dr. Kelly as our new Chief Financial Officer. Tucker recently served as the Executive Vice President and CFO at Deciphera Pharmaceuticals, where he oversaw the growth of the company as it advanced from discovery to direct commercialization in the U.S. and abroad. We built and strengthen the company's investor base and led strategic financial planning related to corporate strategy and pipeline, and this culminated in its $2.4 billion acquisition by [indiscernible] in 2024.

Before joining Deciphera, Tucker also served as CFO of various public and private life science companies and also spent time as a life science investment banker. His experience will be incredibly valuable to our team here at Xenon, where Tucker will be instrumental in our strategic approach to building out the necessary functions, strategies and infrastructure critical to our future commercial success as we await top line data from X-TOLE2 and prepare for our first anticipated drug approval.

I believe he has already made a positive impact and look forward to continuing to collaborate with Tucker as on evolved into a commercial stage company. So with that, I'll turn it over to you, Tucker, to say a few words, and then I can conclude with our financials.

Thanks, and I really appreciate the warm welcome. I'm thrilled to join Xenon at such a pivotal time as the company progresses X-TOLE2 with the goal of delivering positive top line results early next year and planning for the anticipated launch for azetukalner in epilepsy and beyond. I'm excited to apply my experience and expertise driving corporate and financial strategy for U.S. and international life sciences companies to Xenon and working with the team here as we build for commercialization and the impact we could have as a fully integrated biopharma company with the aspiration of delivering life-changing therapeutics to patients. With a healthy balance sheet and solid foundation, the future looks bright for us as we plan for a successful commercialization of azetukalner and our long-term growth.

I have already been out on the road to begin connecting with our investors to share our vision for Xenon to become a leading company in neuroscience into pain. Briefly turning to our financial results. Cash, cash equivalents and marketable securities totaled $555.3 million as of September 30, 2025, compared to $754.4 million as of December 31, 2024. Based on our current operating plans, including the completion of the azetukalner Phase III epilepsy study and supporting late-stage clinical development in MDD and BPD. We anticipate having sufficient cash to fund operations into 2027. Given our strong balance sheet and fiscal management, we are well positioned to support multiple registrational programs for azetukalner and the continued maturation of our early-stage pipeline. I refer you to our press release and the 10-Q filed today for further details on our financial results. And with that, I'll turn the call back over to Ian for closing remarks.

Great. Thank you, Tucker. I hope today's call reflected the excitement and relentless drive that permeates the whole team of Xenon. As we continue to progress our Phase III X-TOLE2 study of azetukalner with the anticipated top line data readout in epilepsy planned for early 2026, we are focused on the preparation of our NDA with the intent to file with positive top line X-TOLE2 data and advance azetukalner towards commercialization, bringing us 1 step closer to delivering a new antiseizure medication for patients still struggling with seizures.

As I mentioned earlier on the call, once the last patient has completed the double-blind portion of the study, we will have visibility to the final time lines, and we will be able to narrow guidance at that time. To round out our azetukalner programs, we see the immense promise of applying azetukalner in other neuropsychiatric conditions and serving other patient populations in need and are proud of the progress with the X-NOVA and EXCEED programs. And while earlier stage, the excitement around our discovery pipeline is tangible. As we apply our ion channel expertise across multiple targets and therapeutic areas and grow these programs we are taking important steps towards becoming a fully integrated neuroscience-focused biopharma company. So with that, I'll pause and operator, we can now open the call up for questions.

[Operator Instructions]

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

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

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

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

Well, just as you can imagine, I mean, we don't wait to start writing the NDA until the top line next 2 data comes. So a lot of work is ongoing and I know a lot has already been completed. So the critical path was your question. it's basically defined by what Ian just said. So incorporating X-TOLE2 into the story that's already being told from a clinical perspective from X-TOLE to create the integrated summer summary of safety and integrated somewhere on efficacy. So that's it. And we're well on our way already, Paul.

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

And welcome to the team again, Tucker. Are you able to disclose where your screen failure rate ultimately landed for X-TOLE2. And generally, when screenouts occurred, were they for reasons as expected from prior experience? And then my second question is just how far behind do you think the results of X-NOVA2 will be from X-TOLE2 think it makes it into 2026.

Thanks, Tess. Again, I'm happy to start, and then Chris can add his perspective. So when we talk about -- I just want to be clear on some definitions upfront. So we will, at the appropriate time, give the screen and baseline failure rate. We have that as a combined number. So those are patients that may have dropped out during the screening period as well as the baseline period. prior to randomization. So again, we're -- with an ongoing study, we don't go into very specific details across a number of different parts of the study, including this. But I would say that it's kind of trended and tracked as we would have expected in the Phase III program. And [indiscernible] goes through probably some of the reasons that you lose patients due to either baseline seizure burden or BMI or compliance or diarrhea or a variety of things that people drop out during the screen and baseline period before randomization. So Chris, do you want to do that? And then I'm happy to address the second question, which is just the timing of X-NOVA2.

I'm happy to do that, but I think you kind of covered it, Ian. I mean, the screen failure rates, largely it's a reflection of [ interstitial ] seizures. And then we have a number of other inclusion-exclusion criteria. And so there can be kind of a smattering of other reasons that fall behind that. But it's been consistent with what we would expect from Phase II test.

And then your question on the MDD program and specifically as it relates to X-NOVA2. So this will be the first Phase III readout from the psychiatry program, we haven't yet given guidance on it. That study, that Phase III study started right at the end of last year, kind of really got up and running in the first quarter of this year as we got most of the sites up and running. We haven't given guidance, and I think we've generally said that in our experience, if we look at our Phase II X-NOVA study, and we extrapolate forward. These studies often take kind of 2, 2.5 years. So as we progress over the next few quarters, we'll be in a position to provide guidance to top line data.

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

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

Yes. I'm happy. Thanks, Joe, for the questions. I'm happy to start. And Darren is here as well and can provide his perspective. Darren's now been here a number of months and had the opportunity to attend one of the big medical congresses in Europe as well as interact with a number of key physicians in the space. So yes, as we talked about in the prepared remarks on a placebo-adjusted basis, we've seen efficacy kind of range from the teens into the low 30s. And so there is quite a range. And it doesn't seem to be predictive of where you are in that range to commercial success. And I think that's to your point, Joe, that there are a number of these other attributes. You specifically referenced Sonova. [indiscernible] is on the higher end of that range from an efficacy point of view, but we do know that Senova made in terms of the titration over 12 to 16 weeks. And as you push that dose higher, there are a number of adjustments that need to be made because of DDIs and tolerability. And so it can be a bit of a more challenging medicine for prescribers and their patients. So again, I think that really reemphasizes the point that we see in the data that efficacy is part of the picture, but not the complete picture. And I think Darren's perspective on this would be really helpful.

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

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

This is Charlie on for Brian.

Are you there, Charlie? We can't hear you come through.

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

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

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

Yes.

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

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

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

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

Yes. I mean, so the bipolar.

Difference in depressive dominance in bipolar 2?

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

Yes.

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

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

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

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

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

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

Great. Chris, do you want to take the first one on X-TOLE2 enrollment and powering and then I'm happy to do data disclosure around 1701 and 1120.

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

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

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

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

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

This is Adi on for Cory. In the recent few months, there have been early Phase II readouts from competitors, if these readouts hold in larger studies, how would that change how you see azetukalner being used? And just another question on how should we think about the operating cost into 2026, given you have to plan for a launch and other Phase IIIs are also planned for next year.

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

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

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

Yes. So on the commercial side, I think we've made some targeted investments already, which we think have been really important for Darren and his team to get prep for even the readout and ultimately commercialization. So we've made those investments so far. And obviously, on the back of data early next year, we'll continue to prep for launch and the OpEx will reflect that, but when we look at really a 2027 launch time frame based on the estimated readout and obviously time to NDA submission, the bulk of the cost in terms of bringing on the sales force and the like will likely fall outside of '26. But yes, we will certainly have an increase on the SG&A side in '26 in the back of positive data to get prep for '27.

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

This is Fatima on to Marc. For the first question, could you please remind us again whether you're planning to assess HAMA or MADRS in X-TOLE2 in patients who have comorbid depression. And do we have any idea that's obviously going to be the proportion of patients. Have you looked at the blinded data of how many patients have comorbid depression.

Second question we have, could you provide more color on the selectivity of Nav1.7 compared to other channels, the [indiscernible] to 1.7 subunit versus other channels. We only disclose information about the occupancy versus off-target effect. Are you going to have any more information about the selectivity. That's it for us. Great. Thanks for the question.

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

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

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

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

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

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

Maybe on the Phase III epilepsy study, can you talk a little bit about your expectation for the change [indiscernible] some use in the Phase III versus the Phase II, given that that's been on the market, obviously, a little bit longer now? And maybe how should we think about that when we see response rates in the placebo and the active arms or the discontinuation rates due to AEs. Is that going to be a consideration? And then maybe just one on -- can you talk a little bit why you don't have an interim analysis in the MDD studies? And is this a consideration with the third Phase III that would start given that you did incorporate one in the bipolar study.

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

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

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

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

But ultimately, there's a little bit more ambiguity in the BPD program than there is in the MDD. And we decided to compensate for that by conducting an interim analysis to allow for the study to be increased in size should we need it. And so yes, we don't see any need to do an interim analysis on the MDD program.

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

It's Brian on for Andrew. Maybe just a follow-up on the interim for the Phase III BPD, what could be in the various scenarios for that interim? And then if you could just share the kind of placebo adjusted basis that you'd like to see associated with those scenarios? And then maybe just one [ X-TOLE3 ] early through timing in a very unlikely worst-case scenario that it doesn't succeed much further behind is probably at this point in time? Do you need to able to file for an NDA in '26?

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

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

That ends our Q&A session, and we appreciate your participation. I will now turn the call back over to Ian for the closing remarks. Ian, please go ahead.

Great. Thank you, operator, and thanks, everyone, for joining us today. If we do not manage to get to your question during the allotted time, we apologize, we did run out of time, and we will reach out directly to you to connect. We look forward to continuing to provide updates as we continue to advance our late and early stage programs as we deliver on critical milestones over the coming months and quarters. So thanks, everyone. Thank you for joining the call.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JP, over to you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In summary, analgesics can act along multiple different points of the pain pathway, and we believe that Nav1.7 and Kv7 are compelling pain targets because they play significant roles in the initial transduction of pain stimuli into pain signals the transmission of those pain signals along nociceptive neurons and the relay from peripheral sensory neurons to spinal cord neurons in the central nervous system.

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

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

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

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

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

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

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

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

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

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

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

First, this is supported by high levels of Kv7 expression throughout the pain pathway, and our data shows that Kv7 is enriched in the C and A delta pain subtypes of sensory neurons. Second, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain. Additionally, evidence supports the dysfunction or down regulation of Kv7 activity has been observed in altered pain states.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As noted in the examples listed, chronic pain encompasses a wide range of conditions from osteoarthritis and diabetic neuropathy to cancer pain. Each of these conditions may respond differently to treatment depending on the underlying mechanisms involved. Our focus is on leveraging mechanistic insight, especially around ion channel function to target pain at its source and develop precision therapies that can address both the complexity and the chronicity of pain.

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

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

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

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

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

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

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

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

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

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

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

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

Jim, maybe I can get you to start here?

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

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

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

Back to you, Ian.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you, everyone.