Yahoo Finance Xenon Pharmaceuticals Inc. (NASDAQ:XENE) Q1 2024 Earnings Call Transcript
Xenon Pharmaceuticals Inc. (NASDAQ:XENE) Q1 2024 Earnings Call Transcript May 9, 2024
Xenon Pharmaceuticals Inc. beats earnings expectations. Reported EPS is $-0.61771, expectations were $-0.69. Xenon Pharmaceuticals Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Thank you for standing by. My name is Liz, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the First Quarter 2024 Xenon Pharmaceuticals Incorporated Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I’d now like to turn the call over to Chad Fugere, VP, Investor Relations. Please go ahead.
Chad Fugere: Thank you, Operator, and good afternoon. Thank you for joining us on our call and webcast to discuss Xenon’s first quarter 2024 financial and operating results. Joining me today are Ian Mortimer, Xenon’s President and Chief Executive Officer; Dr. Chris Kenney, Xenon’s Chief Medical Officer; Dr. Chris Von Seggern, Xenon’s Chief Commercial Officer; and Sherry Aulin, Xenon’s Chief Financial Officer. Ian will begin with a summary of our recent progress, Chris Kenney will provide an overview of our ongoing clinical stage program, including our plans and major depressive disorder or MDD, Chris Von Seggern will summarize key findings from recently completed market research, and Sherry Aulin will close with a summary of our financial results and anticipated milestone events before opening the call up to 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 efficacy of our clinical trial design, our ability to successfully develop and achieve milestones in our clinical development program, the timing and results of our interactions with regulators, our ability to successfully develop and obtain regulatory approvals, anticipated enrollment in our clinical trials and the timing thereof, and our expectation that we will have sufficient cash to fund operations into 2027.
Today’s press release summarizing Xenon’s first quarter 2024 financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investor Section of our website at xenon-pharma.com and filed with the SEC and on SEDAR+. Now, I would like to turn the call over to Ian. Ian?
Ian Mortimer: Thank you, Chad, and good afternoon, everyone, and thanks for joining us on our call today. Before I provide an update on our pipeline, I’m excited to announce that we have received approvals from the United States Adopted Names, or USAN Council and the World Health Organization International Nonproprietary Names, or INN Expert Committee for the use of azetukalner as the nonproprietary or generic name for XEN1101. Notably, the kalner suffix refers to the molecule’s novel Kv7mechanism of action. If ultimately approved for use in patients, azetukalner would become the first medicine with a kalner suffix to be launched commercially. This is an important milestone for Xenon and represents another step forward as we advance azetukalner towards commercialization.
Moving now to our pipeline, this past quarter, we continue to make strong progress. Our team remains focused on three key areas. Number one, the continued execution of our azetukalner Phase 3 epilepsy program. Number two, the expansion of azetukalner beyond epilepsy with our MDD program. And three, the continued advancement of our discovery portfolio. First, in our epilepsy program, patient enrollment continues to progress in our X-TOLE2 and X-TOLE3 clinical trials in focal onset seizures, or FOS, and our X-ACKT clinical trial in primary generalized tonic-clonic seizures or PGTCS. We continue to anticipate the patient enrollment for the first of these trials, X-TOLE2, will complete in late 2024 to early 2025. Second, we made important advancements in our azetukalner MDD program over this past quarter, including reaching alignment with the FDA through end of Phase 2 interactions on key components of our Phase 3 program, which we look forward to initiating in the second half of this year.
We are also continuing to evaluate additional opportunities for azetukalner, focusing specifically on other potential neuropsychiatric indications where a scientific rationale exists, as well as a commercial fit with epilepsy and MDD. Later in the call, Chris Kenney will provide additional details on next steps in our MDD program. And third, we are continuing to progress our early stage discovery efforts. As a reminder, azetukalner is the most clinically validated and advanced Kv7 therapeutic in development across multiple indications and we see the mechanism as having broad potential applicability. The breadth and depth of potential therapeutic indications for the mechanism provides a compelling strategic rationale for the development of additional Kv7 product candidates that are chemically diverse from a azetukalner and could provide additional development opportunities.
For that reason, we are excited to continue to leverage our ion channel expertise with the goal of progressing multiple Kv7 molecules forward into clinical development in order to extend the reach of this promising and differentiated mechanism to more patients in need. Beyond our robust potassium channel development efforts, we continue to evaluate and advance development candidates targeting sodium channels, including Nav1.1 and Nav1.7, which may have utility in treating seizure disorders and pain, respectively. We expect multiple candidates to move through GLP toxicology studies and into clinical development over the next few years. During the first quarter, we also continued our outreach efforts to key opinion leaders and leading physicians.
At the recent annual meeting of the American Academy of Neurology or AAN, we hosted two oral presentations related to our X-TOLE epilepsy program and we engaged with neurologists and epileptologists who continue to express significant excitement about azetukalner’s unique and compelling profile in both epilepsy and MDD. We look forward to continuing to showcase azetukalner at upcoming medical conferences throughout the remainder of this year, and Chris will note some of the near-term conferences where Xenon will have a presence. So we’re off to a great start to the year and I’m proud of the continued progress across Xenon’s pipeline, including both clinical and preclinical efforts. So now, I’ll turn the call over to Chris Kenney, who will provide some additional details on the progress within our azetukalner clinical programs.
Chris, over to you.
Dr. Chris Kenney: Okay. Thanks a lot, Ian. Before summarizing our clinical development programs, I’d like to touch on our recent presence at AAN in March. Importantly, our abstracts focused on the azetukalner and epilepsy. We’re selected for two oral presentations and we’re grateful to our epilepsy opinion leaders, both Drs. Jackie French and Dr. Dr. Roger Porter, for presenting data on our behalf. In particular, we highlighted results from our ongoing X‑TOLE open-label extension study, which demonstrated impressive seizure freedom rates, including one in four patients who were on treatment for two years or more, achieving at least 12 months of consecutive seizure freedom. In addition, we have now generated more than 600 patient years of safety data, with some patients having been on a azetukalner for more than four years, supportive of a well-tolerated drug profile.
Turning to an update on our clinical development efforts within our Phase 3 epilepsy program, our three clinical trials, X-TOLE2 and X-TOLE3 in focal onset seizures and X-ACKT in primary generalized tonic-clonic seizures continue to progress. As Ian mentioned, we continue to anticipate completion of X-TOLE2 patient enrollment later this year or early 2025. As a reminder, we intend to submit an NDA upon the successful completion of X-TOLE2, our first Phase 3 clinical trial, along with the existing data package from our Phase 2b X-TOLE clinical trial and additional safety data from other clinical trials to meet regulatory requirements. Within our MDD program, we’ve made significant progress towards advancing our Phase 3 development plans based on the encouraging topline data generated from our Phase 2 proof-of-concept X-NOVA study.
Earlier this year, we submitted to the FDA our end-of-Phase 2 briefing package, which included our draft Phase 3 protocol synopses in preparation for an April in-person meeting. Prior to the meeting, we received preliminary written feedback from the FDA in response to our briefing package. The feedback was comprehensive and fully addressed our questions to FDA. As a result, the in-person portion was determined not to be necessary. We’re pleased to have been able to efficiently achieve alignment with FDA, enabling us to continue progressing our MDD program into late-stage development. Broadly, our development plans include three Phase 3 clinical trials in MDD, each with one active drug on them or 20 milligrams versus placebo, using the Hamilton Depression Rating Scale or HAM-D17, as the primary endpoint, assessing efficacy in depression and continuing to assess the efficacy of the azetukalner on improvements in anhedonia, as well as HAM-D17 at week one, with hopes to confirm the compelling data we generated around the rapidity of onset in the X-NOVA study.
Having now reached alignment with FDA on key design elements of the Phase 3 program, we’ve all selected our CRO and are working to finalize our protocols. Once the final protocols are filed, we intend to provide additional details around the design of our MDD studies and look forward to initiating the first of these Phase 3 clinical trials in the second half of this year. As Ian noted, we recognize the importance of continuing to educate the healthcare community about the potential benefits of the azetukalner. This week, the Xenon team attended the Annual Meeting of the American Psychiatric Association or APA in New York. We’re also pleased to announce that we will present the X-NOVA topline data at the Annual Meeting of the American Society of Clinical Psychopharmacology or ASCP, taking place in Miami from May 28th to 31st.
This will be the first time these promising results are presented at a major medical meeting and will represent yet another opportunity to raise awareness of the azetukalner’s differentiated profile and potential impact within the MDD population. I’ll now turn the call over to Chris Von Seggern, who will summarize findings from recent market research outlining the azetukalner value proposition. Chris?
Dr. Chris Von Seggern: Thanks, Chris. On last quarter’s call, we discussed our market research findings that have informed our clinical development and commercial plans in depression. To recap, we conducted primary research with 150 high-volume prescribing physicians who expressed interest in the azetukalner’s potential profile with ease-of-use properties, such as once-daily dosing without the need for titration, rapid onset of effects, novel mechanism of action, differentiated safety profile compared to standard-of-care agents like SSRIs and SNRIs, and ability to address anhedonia, a common comorbidity of depression. These findings suggest there could be a compelling product fit for azetukalner in the MDD treatment landscape, particularly for patients where the remaining unmet medical need resulting from inadequate response to initial therapies or those that experience common adverse events such as significant weight gain or sexual dysfunction.
This past quarter, we conducted further market research with practicing epileptologists and neurologists in the U.S. to better understand the unmet medical need associated with depression in epilepsy patients. As we have mentioned previously, we believe the data generated in major depressive disorder to-date adds to our already clearly differentiated profile in epilepsy. Our past research has indicated that depression is a common comorbidity in epilepsy and that the condition is often underappreciated and potentially undiagnosed, particularly in more difficult-to-treat patient populations. We also know that comorbid depression is associated with worse compliance and poorer outcomes for patients suffering from epilepsy. Our recent research supports a clear need for novel medicine that offers potent seizure reduction while potentially addressing mood-related conditions.
Past research has reinforced the value proposition of a azetukalner in FOS, with physicians indicating significant interest in a novel Kv7 mechanism that will require titration and demonstration of rapid efficacy at one week. A potential benefit in depression further enhances the profile of azetukalner in epilepsy and physicians cited lamotrigine is an analog that offers mood benefit in this patient population. Our recent research serves to strengthen our conviction around the highly differentiated profile that is emerging for a azetukalner in FOS and we believe that if approved, azetukalner will be a mainstay of treatment for patients with vocal onset seizures. I will now turn the call over to Sherry to summarize our financial results and upcoming milestones.
Sherry?
Sherry Aulin: Thanks, Chris. Beginning briefly with our financial results, Xenon is well-positioned with a strong balance sheet to support our plans for azetukalner and other earlier stage programs in our pipeline. As of March 31, 2024, cash and cash equivalents in marketable securities were $885.4 million, compared to $930.9 million as of December 31, 2023. Based on current operating plans, including the completion of the azetukalner Phase 3 epilepsy studies and fully supporting late-stage clinical development of azetukalner and MDD, we anticipate having sufficient cash to fund operations into 2027. I would refer you to our news release and 10-Q report for further details around our financial results. We remain focused on our goal to improve outcomes for patients in areas of high unmet medical need.
Looking ahead, we anticipate a number of important milestones and events -- and goals. We will continue to advance our azetukalner Phase 3 epilepsy program, including our X-TOLE2 and X-TOLE3 clinical trials in FOS and our X-ACKT clinical trial in PGTCS, with patient enrollment in X-TOLE2 expected to complete in late 2024 to early 2025. We expect to initiate the first of three Phase 3 clinical trials in MDD in the second half of 2024. We will continue to explore other development opportunities for azetukalner and we will continue to advance our early stage preclinical ion channel programs with the goal of advancing multiple candidates into IND-enabling studies in 2024 and 2025. Our strong belief in a azetukalner’s potential to play a role in epilepsy, major depressive disorder and potentially other indications is centered around its unique mechanism of action and attractive product profile supported by the clinical data generated to-date.
We look forward to keeping you updated on our progress. I’ll now ask the Operator to open the line for any questions. Operator?
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