Xenon Pharmaceuticals Inc FDA announcement

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 and current and anticipated indications, addressable market, regulatory success, and commercial potential of our and our partners' product candidates.

The efficacy of our clinical study designs, 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 two 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 four doses of azetukalner, or AZK, demonstrated a statistically significant reduction from baseline in monthly seizure frequency compared with placebo.

X-TOLE II 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 toward 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-TOLE II 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 KOLs throughout the meeting. In addition, we had six presentations over the course of the congress. It was incredibly gratifying to hear unsolicited comments during our X-TOLE II podium data presentation, where two 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-TOLE II 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 anti-seizure 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 two 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 three 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 is 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 azetukalner 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 azetukalner 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. We now expect top-line results for X-NOVA2 in the first quarter of 2027. I am 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 azetukalner 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 is important to review the scientific hypothesis and support for this clinical development program. Our hypothesis for azetukalner 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 antidepressive effects for the Kv7 mechanism, as well as genetic links in BPD with Kv7, including evidence of Kv7 downregulation. As you have 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.

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 are 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 one patient in X-TOLE and one patient in X-TOLE2 with psychosis. It is 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 are pausing recruitment to institute changes to improve tolerability within these patient populations, MDD and BPD.