Xenon Pharmaceuticals Inc (XENE) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Xenon Pharmaceuticals Report Second Quarter 2023 Results Conference Call. (Operator Instructions) After the speakers' presentation, there will be a question-and-answer session.

I will now turn the call over to Sherry Aulin, Chief Financial Officer.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's second quarter 2023 financial and operating results. Joining me are Ian Mortimer, Xenon's President and Chief Executive Officer; Dr. Chris Kenney, Xenon's Chief Medical Officer; and Dr. Chris Von Seggern, Xenon's Chief Commercial Officer. Ian will open today's call with a summary of our proprietary pipeline programs and Chris Kenney will provide an overview of our ongoing XEN1101 clinical program. I will summarize our financial results, progress within our partnered programs and our anticipated company milestone events. Chris Von Seggern will be available during our Q&A session to address questions about our commercialization strategies.

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, 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 XEN1101 and other development programs, the timing and results of our interactions with regulators, our ability to successfully develop and obtain regulatory approval of XEN1101 and our other product candidates, anticipated enrollment in our clinical trials and the timing thereof, and our expectations that we will have sufficient cash to fund operations into 2026.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statement. Today's press release summarizing Xenon's second quarter financial results and the accompanying annual report on Form 10-Q will be made available under the Investors section of our website at www.xenon-pharma.com and filed with the SEC and on SEDAR.

Now, I'd like to turn the call over to Ian.

Thanks, Sherry. Good afternoon, everyone. Thanks for joining us on our call today. We are excited about the continued progress across all aspects of our business during the past quarter. To begin, I'm pleased to announce that patient enrollment is now complete in our XEN1101 Phase II X-NOVA study in major depressive disorder or MDD, and we expect the last patients to be randomized in the very near term. Based on the completion of screening, we estimate that more than 160 patients will be randomized.

And just as a reminder, the original trial design was to randomize 150 patients or 50 patients per arm of 10 milligrams of XEN1101, 20 milligrams of XEN1101 or placebo. Additionally, we have now further narrowed our Q4 guidance and look forward to announcing X-NOVA top line data in late November to mid-December. In advance of these results, we intend to host a webinar with key opinion leaders to review the MDD landscape, including findings from our own market research. We'll also discuss the mechanistic rationale supporting Kv modulation as a treatment for MDD and review the key elements of our X-NOVA clinical trial. We are targeting mid-September for this webinar, and we'll issue a webcast advisory notice confirming our speakers and additional access details to ensure that you can all virtually attend and participate.

We also continued to advance our broad XEN1101 Phase III epilepsy program and strengthen our leadership position in the Kv field with XEN1101 representing the only potassium channel opener in late-stage clinical development with important derisking clinical data generated from our X-TOLE Phase IIb clinical trial. All Phase III epilepsy clinical trials are actively recruiting patients, including X-TOLE2 and X-TOLE3 in patients with focal onset seizures or FLS and X-ACKT in patients with primary generalized tonic-clonic seizures or PGTCS.

As noted on our last call, we continue to maintain a high degree of confidence in our ability to execute on our XEN1101 Phase III epilepsy clinical development plans. We have the advantage of being able to draw upon our experience with our X-TOLE Phase IIb study, which was similar in size and design to both X-TOLE2 and X-TOLE3. And the established strong relationships with key investigators who are already familiar with XEN1101. We expect to provide guidance later this year regarding our estimated timing of study completions.

In addition to our ongoing Phase III epilepsy program in adults, we also continue to execute on our strategy for the pediatric development plan for XEN1101. Based in part on feedback from FDA, our team is conducting ongoing work on a pediatric formulation of XEN1101 for younger patients. In addition, the FDA's PK extrapolation role for focal onset seizures allows us to move into cohorts of progressively younger patients with focal onset seizures with XEN1101 in an open-label setting over time. Finally, also driven by feedback from FDA, we're in the process of expanding the X-ACKT Phase III clinical trial to include patients as young as 12 years of age.

Before I pass the call to Chris Kenney, I'd like to extend a warm welcome to Dr. Gillian Cannon and Mr. Justin Gover, the 2 newest appointments to our Board of Directors that were announced yesterday. Briefly, Gillian brings a vast knowledge of commercializing novel medicines and leading successful neuroscience franchises of large pharmaceutical companies. She's been involved in the commercial efforts of some of the most important epilepsy and depression drugs over the past decade. And many of you will be familiar with Justin as the founding CEO of GW Pharma.

Justin and his team led the development and commercial launch of Epidiolex and the eventual sale of GW to Jazz Pharmaceuticals in 2021 for $7.2 billion. Justin has a deep understanding of what it takes to build companies like Xenon and he's passionate about the epilepsy space. We are looking forward to leveraging the experience of both Gillian and Justin as we continue our efforts on the late-stage clinical development of XEN1101, prepare for commercialization and progress towards achieving our strategic objective of building a leading, fully integrated neurology company.

I'd now like to turn the call over to Chris Kenney, who will give additional details on the progress made across our clinical programs and provide a look ahead at some of the upcoming medical meetings where the Xenon team will have a strong presence. Chris will also discuss the significance of the additional XEN1101 X-TOLE open-label data that is focused on quality of life measures, which is to be presented at the upcoming International Epilepsy Congress in September.

So Chris, over to you.

Thanks a lot, Ian. Building upon Ian's comments, beginning first with our X-NOVA program in MDD, I'm looking forward to cohosting a webinar in mid-September alongside key opinion leaders in the major depressive disorder space. We intend to focus our discussion on the potential for the Kv7 mechanism to treat MDD and outline the importance of the rationale and trial design of our Phase II X-NOVA study. Importantly, these top line data will help guide our future plans for XEN1101 in MDD.

You will recall that our initial decision to examine XEN1101 in MDD was based on encouraging published clinical results with ezogabine as well as promising preclinical data with XEN1101. We were further interested in gathering additional data given that depression is a common comorbidity within the epilepsy patient population. With patient enrollment now complete, the last few patients are expected to be randomized in the very near term, which will then be followed by a 6-week treatment period, a 4-week follow-up visit and then database lock and data analysis. Given these steps, we're looking forward to a top line data readout for XNOVA in late November to mid-December of this year.

Turning to our Phase III epilepsy programs, as a brief reminder of the ongoing clinical trials within our robust Phase III program, our X-TOLE2 and X-TOLE3 clinical trials are running in parallel with each study targeting enrollment of approximately 360 subjects with focal onset seizures, who will be randomized 1:1:1 for once daily dosing of either 15 milligrams or 25 milligrams of XEN1101 or placebo. The primary efficacy endpoint is the median percent change or MPC and monthly seizure frequency from an 8-week baseline to the 12-week double-blind period with XEN1101 compared to placebo.

Our Phase III X-ACKT clinical trial is expected to enroll approximately 160 subjects with primary generalized tonic-clonic seizures. Subjects will be randomized 1:1 for once daily dosing of either 25 milligrams of XEN1101 or placebo. The primary efficacy endpoint is the MPC and monthly PGTCS frequency from an 8-week baseline through the 12-week double-blind period of XEN1101 compared to placebo. Of note, we believe we have a strong development rationale for PGTCS based on the Kv7 mechanism and the photosensitivity proof-of-concept model of generalized epilepsy. Favorable data in multiple preclinical epilepsy models and the Phase IIb X-TOLE clinical data that looked at seizure subtypes, including those focal seizures that progress to bilateral generalized futures.

Our unique parallel development approach in both focal onset seizures and primary generalized tonic-clonic seizures, allows us to set the foundation for potentially broader use of XEN1101 in 2 of the most common forms of epilepsy should it be approved. As Ian mentioned, our team is excited to showcase XEN1101 at medical conferences later this year, including our presence at the upcoming 35th International Epilepsy Congress in Dublin in September, where we have the opportunity to highlight new quality of life data from the ongoing X-TOLE open-label extension study. We're excited to present these new data that focus on the QOLIE-31 subscales of seizure worry, social functioning and medication effects.

Our analysis of these quality of life domains is important and can potentially provide us with insights around how drug tolerability, better seizure control and improved seizure freedom rates positively affect patients' quality of life. Looking a bit further ahead at AES 2023 in Orlando this year, we expect to provide longer-term OLE data from X-TOLE, supporting the long-term use of XEN1101 as well as important seizure freedom data. We are excited to continue to raise the profile of XEN1101 with physicians and the medical community and look forward to keeping you updated on our progress.

I will now turn the call over to Sherry, who will give us a brief update on our partnered program with Neurocrine before summarizing our first quarter financial results and upcoming milestones. Sherry?

Thanks, Chris. Beginning with our partnered programs, our collaborators at Neurocrine are conducting 2 separate Phase II clinical trials evaluating NBI-921352. One study is focused on adult patients with focal onset seizures and the other study is examining the use of NBI-921352 in pediatric patients with SCN8A-related epilepsy. Neurocrine has now completed patient enrollment in its adult focal study and we look forward to results in the fourth quarter of this year.

I'll now touch on some highlights from the financial statements and would refer you to our news release and 10-Q report for further details. Cash and cash equivalents and marketable securities were $652.2 million as of June 30, 2023, compared to $720.8 million as of December 31, 2022. Based on current operating plans, including the completion of the XEN1101 Phase III epilepsy studies, we anticipate having sufficient cash to fund operations into 2026.

Before concluding our prepared remarks, I'll briefly summarize some of our goals and milestone events ahead, including, as Ian mentioned, a data-rich period for Xenon between now and the end of the year. Firstly, we look forward to 2 important clinical data readouts in the near term. Our top line results anticipated in late November to mid-December from our X-NOVA clinical trial in MDD. We also expect another data readout in the fourth quarter of this year from the adult focal onset study conducted by our partner, Neurocrine.

In September, we're looking forward to hosting a webinar focused on XEN1101 and MDD. We're excited to present additional XEN1101 X-TOLE open-label extension clinical data with a focus on quality of life data at IEC in September and longer-term OLE data, including rates of seizure reduction and seizure freedom at AES in December. Importantly, we continue to make progress on advancing our XEN1101 Phase III program, including our X-TOLE2 and X-TOLE3 clinical trials in FOS and our exact clinical trial in PGTCS with the intention of providing guidance on study completion later this year.

In closing, I'd like to echo Ian's warm welcome to our newest Board members who will bring additional world-class leadership to Xenon. I believe this is an incredibly exciting time at the company and our team is motivated to execute on our ambitious plans, driven by the hope that we can improve the lives of patients living with epilepsy. We look forward to reporting on our progress in the months ahead.

I'll now ask the operator to open the line for any questions.

(Operator Instructions) Our first question comes from Tessa Romero with JPMorgan Chase.

So bigger picture, have you landed on what level of detail you think you might provide in your top line release for X-NOVA? And relatedly, I think you've previously confirmed that there will be p-values on your key secondary endpoints of the [SHAPS in the bay]. Just curious, have you disclosed any details on the statistical assumptions on these 2 scales?

So, I'll start off and provide a little bit of detail. And then Chris Kenney, I think this may be a good opportunity just to remind people of the statistical analysis used, obviously, driven by the primary endpoint on MADRS. But in terms of level of detail in our disclosure, we said a couple of things historically, Tess. I think one is, I think you can look at our X-TOLE data in epilepsy as a bit of a guide. So, you should expect in the top line press release from us, obviously, the key efficacy endpoints, which includes not just the primary endpoint, but as you referred to some key secondary endpoints. Overall, we'll have some discussion just around the AE profile and tolerability in this patient population as well. And then we're committed to talking about the next steps in terms of the development of XEN1101.

As we mentioned in both the press release and in the prepared remarks, we do have this webinar coming up that we're planning for in mid-September. That will be another opportunity for us just to refine a little bit better for everyone in terms of the information that will be provided at top line. But that's a bit of a guide.

So Chris, maybe we can just talk about the statistical analysis on the primary endpoint.

Yes. Just -- I mean, I think if you take a look at the X-TOLE top line press release from a couple of years ago, I think you get a pretty good idea. I mean the program is -- the study rather is obviously focused on depression and so the endpoints will focus on depressive symptoms. As far as the powering of this study goes, we focused on powering it for the primary endpoint, which is the MADRS. And this study is powered to achieve a 4 point separation between active and placebo.

Our next question comes from Paul Matteis with Stifel.

Congrats on all the progress. As it relates to the Phase III in epilepsy, just what specifically do you want to learn between now and later this year, Ian before you feel comfortable guiding? I mean asked another way, where do you kind of want to be at with the study in terms of sites open and enrollment to have kind of that full visibility? And then just quickly on the Neurocrine partnered 1.6 program. Just curious kind of how Xenon is thinking about the criteria that you want to see clinically in order to exercise your opt-in there to be able to augment your economics ultimately.

Paul, I'll comment on kind of the Phase III epilepsy guidance. And Sherry, you and I can talk about the Neurocrine both what is the opt-in. I think we can just remind people what the opt-in background is and then kind of the information that we require to make that decision. So, in terms of the Phase III epilepsy program, it's probably helpful maybe just to review a little bit of history. So, the X-TOLE2 study was first up and running. That was really right at the end of last year. And then that was followed by the X-ACKT study a few months later and then a few months after that in terms of X-TOLE3.

So, we've been kind of rolling getting all of these studies up and running. The first jurisdiction for all of the studies has been the U.S. So, we've had U.S. sites up and running. And then over time, we've been bringing other jurisdictions online. And just as a reminder, if we go back to the X-TOLE program, which we're trying to mirror as best we can, especially in the X-TOLE2 clinical trial, 60% of the patient enrollment in X-TOLE came from Europe and 40% came from the U.S. So, I'd say what's the information that we're continuing to generate while we're continuing to get sites up and running in jurisdictions. Some of those come online over time as everybody is aware.

And then we're monitoring, so site initiation. We're monitoring the patients that are being screened, what our screen failure rate is and then what our overall kind of randomization. And it's all that information that we're bringing together that gives us confidence in providing guidance to study completion. And I think we've been really consistent saying that later this year, we'll be in a position to give that guidance. Moving to the Neurocrine question, maybe Sherry can walk through kind of what the opt-in rights are and what that means, just as a reminder for everyone. And then I'm happy also to provide some comments on what we may want to see before moving forward with that opt-in.

So, as a reminder for the lead compound, we have a co-fund option and we would be able to trigger that co-fund option once we have certain pieces of information. And importantly, that includes an approved Phase III protocol as well as a complete Phase III budget from Neurocrine. At that stage, we can make a decision to potentially opt-in to co-fund the Phase III program and that would give us an additional 5% step-up in the royalty. Just for -- as a reminder, that program, the royalty rates under that program are tiered in the low- to mid-teens. And so at the highest and if we do co-fund Phase III, we would be eligible for up to 20%.

And then in terms of what -- to build on what Sherry said, I mean, obviously, the budget is important. The benefit that we have sitting here at Xenon is we have a tremendous amount of experience in running global epilepsy studies in Phase II and now in Phase III. So, I think we have a good handle on really what the budget implications would be. But we have the opportunity to see the complete data set. I think one outstanding question is after this Phase II study and we see the data from Neurocrine and focal onset seizures in Q4 of this year, what are the next steps in the program.

And so today, we don't know whether the next steps would be to go directly into a Phase III study or it would be additional work prior to that. So, we're not sure of the timing that we'll need to make the opt-in decision, but obviously, we'd want to see the data to be able to do that. The benefit in epilepsy and we talked about this previously, is just the consistency we see between studies. So, we see this with other anti-seizure medicines. And obviously, our expectation with XEN1101 is that drugs that work in Phase II do have this consistency in data when they go into Phase III clinical trials and across different clinical studies. And so I think we have the benefit of if we see data that we believe are supportive of our opt-in that there's a high probability of consistency.

Our next question comes from Brian Abrahams with RBC Capital Markets.

Congrats on the continued progress and welcome to the 2 new Board members. A question on the MDD study. I'm curious the latest on what you guys are looking for from a safety standpoint to potentially move ahead in MDD as a discrete indication. Is there a bar for CNS side effects among regulators or physicians? And any changes to where that bar may be given some of the recent regulatory developments in the MDD space over the last week?

Brian, I think what would be helpful here is, Chris -- I'll make a couple of comments maybe on regulatory. Obviously, there's been a lot of conversations with Xenon and publicly around just updates on the MDD space most recently. So, I'm happy to provide a little bit of commentary there. And then Chris Kenney, let's -- why don't you walk through the safety data we know to date from X-TOLE because that's the information that we have now on an unblinded basis both from the X-TOLE study as well as open-label extension. And then Chris Von Seggern, we've done -- let's walk through our market research, where we've looked at that adverse event profile and at least testing that from a research point of view with physicians in the MDD space.

Kind of our overall comment, I think, just on recency and what's been going on publicly because I don't think it changes anything, Brian, in the near term for us. I mean we're in Phase II in depression right now. As we've talked about, we finished patient enrollment in the X-NOVA study. We need to get to those top line data. We need to look at the efficacy as well as the overall safety and tolerability profile. And as we said, we would give guidance on next steps in the program at that time. And if the next steps are to move into a late-stage clinical development program, we would engage with regulators at that time and I think we would -- that would be very informative. But it's premature to say any more than that right now.

Chris Kenney, over to you, maybe just to talk about the AE profile overall on what we know on XEN1101 and then over to Chris Von Seggern?

Right. So I mean, first of all, in terms of what we would expect with the depression, I mean, it remains to be seen how the drug will be tolerated in that population relative to the epilepsy population. We obviously, during the conduct of the trial, we keep an eye on the data very closely. It's being assessed in a blinded fashion and so there are limitations to what you can really glean from that. But what we can say is that it's behaving very much on par with what would be expected with pooled data from X-TOLE.

And so what I mean by that is that what we learned from X-TOLE were a few different things. One, that the 10 milligram dose, again, I want to be clear what I'm allowed to say is about X-TOLE. We don't know what it will be for X-NOVA. But with X-TOLE and focal onset seizures, the safety profile of 10 milligrams was hard to distinguish from placebo in many, if not all, instances. And then going up to the 20 milligram dose, there was an increase in adverse events such as dizziness and (inaudible) and fatigue and headache to a lesser extent. And so it remains to be seen how the major depressive disorder population will tolerate the drugs. They're not on concomitant medications. And obviously, there -- it's a different population of patients. So, we'll see. But so far, the blinded data that you would expect from a study with placebo 10 milligrams and 20 milligrams is behaving as we would expect. We'll flip the card later this year and we'll see what it shows.

And maybe build for a moment from a market research perspective, as Ian mentioned, we've conducted market research to better understand the potential path forward for XEN1101 in major depressive disorder. And given what Chris just mentioned about the AE profile, we've leveraged the data coming from X-TOLE to understand the range of receptivity from a physician perspective with the data we have, again, in an epilepsy population. And what we've heard is quite consistently enthusiasm around the profile of XEN1101, given the potential range of adverse events if they are consistent with that epilepsy population.

And part of this is anchored on the novel mechanism of action of the product, the potential to differentiate from other therapeutic options available in the lack of important adverse events that exist in the MDD space such as sexual dysfunction. So, there is receptivity in light of the AE profile that has been tested in the past and that's an important component to note.

Our next question comes from Andrew Tsai with Jefferies.

So, as we think about the next steps for XEN1101 in MDD, which will be shared in conjunction with your top line data, I think you said one option could be to introduce a new ion channel. So, can you give us a flavor on the characteristics of these compounds you have preclinically, how much better on efficacy, better safety, potency and so forth. And if you were to introduce a new compound, would there be a way to expedite its clinical path as it relates to generating Phase II proof-of-concept data?

And just to remind people, we have said historically that we believe we have different options in -- after the X-NOVA data are available. We've done a lot of work, both in terms of looking at future clinical development as well as having commercial input and our options are to do continued development in major depressive disorder as a primary indication. We've talked about that. We've also talked about continuing to differentiate XEN1101 in the epilepsy space. We know that depression is the most common comorbidities. So, generating data on mood is important in epilepsy.

And then Andrew, you've referred to potential chemistry or molecule differentiation as we think about different therapeutic areas. Our backup molecules or our molecules behind XEN1101, the target potassium channel modulation are still preclinical. So, they haven't yet moved into clinical development. So, there is a time gap and there would be the required studies to do both preclinically as well as in early clinical development before we could get those into efficacy studies. So, there are a number of steps that we need to do.

In terms of how we compare, we feel strongly about our leadership position in ion channel drug development and drug discovery. We have multiple chemistries that we've looked at and are looking at in terms of targeting potassium channels. When we look at XEN1101, there's nothing obvious that we need to solve for. If we look at the current attributes of the drug, it's clearly a QD drug, which has a long half-life, which is really probably benefiting for any potential missed doses.

Obviously, we have a compelling efficacy profile when we compare it on a placebo-adjusted basis to other anti-seizure medicines. We obviously have a novel mechanism, no titration associated with XEN1101. So, there's no obvious thing that we're trying to solve for. It's really about chemistry differentiation. And every molecule is going to look a little bit different, both on potency as well as on a different profile overall. So, we're not too hung up on any one characteristic preclinically, more just having chemical diversification that we would move forward into clinical development.

Our next question comes from Jason Gerberry from Bank of America.

This is Dina on for Jason. Congrats on the quarter. Just wondering if you see any read across from the recent Sage CRL as it pertains to the broader leniency of the FDA neuro division with Billy Dunn's departure? And what's your continued confidence that X-TOLE Phase IIb will be counted as a pivotal trial?

Yes, I'm happy to start. Chris Kenney, I think you provide your -- let's provide your perspective as well. Yes, just as a reminder, I mean, we've had -- your question is specifically even though the CRL that you're referring to is in MDD, what read across that may have into a different division, which is neurology for our epilepsy program. Obviously, where we are today is we've had an end of Phase II meeting and we've communicated to the agency our plan to run a broad Phase III development plan, which includes 2 Phase III clinical trials in focal onset seizures and the study in parallel, a single study in primary generalized tonic-clonic seizures. But our plan to file in what's gating to file is X-TOLE2.

So, using X-TOLE as one of the studies using X-TOLE2 as the second study. And we believe we had good and constructive dialogue and conversation with the agency at the end of Phase II meeting and they understand our plan. Ultimately, these are always review issues and the agency looking at the totality of the data that's being generated. But as we sit today, we're confident in terms of the development plan, which we've laid out.

Chris, anything to add?

Well, so, I fully acknowledge that as people rotate in and out of organizations like FDA that there can be difference in their view. There's no doubt about that. I think that when things are crystal clear, there's probably less fluctuation from one individual to another. And so if you take a look at the X-TOLE study and you take a look at the FDA guidance in terms of what it is, what it takes to be considered an adequate well-controlled study, it's a study that appears to check all those boxes. To Ian's point, we won't know until it's a review issue, but our plan hasn't changed, which is to roll out X-TOLE2 data. And assuming those results are positive, combine them with X-TOLE, and that could be sufficient information for what FDA requires for integrated summary of efficacy. So, that our position hasn't changed.

Our next question comes from Paul Choi with Goldman Sachs.

Congratulations on the progress. I have 2 questions on X-NOVA. My first is, can you maybe comment on what a placebo response risk mitigation efforts you've undertaken here. ClinicalTrials.gov hasn't been updated in over a year, but I assume you added additional sites to the 6 that are currently listed there. So, in terms of center experience, recruiting for patients competing with other trials or studies and what your CRO is doing there. If you could maybe comment on that, that would be great.

And second, if both the 10 mg and 20 mg doses show statistically significant results, can you maybe comment on scenarios on how you're thinking of approaching the FDA for your registrational study with regard to a minimally efficacious dose versus for the 10 versus the 200 milligram doses?

So, I can -- yes, I'll tackle the second question, Chris. And then if you want to -- if you can walk through -- I know we've done it on previous calls, but I think it's a relevant question. So thanks, Paul, on just the risk mitigation strategies around managing placebo and depression studies and how that relates to our X-NOVA study. On the second question, Paul, I think it's just a bit premature until we see the data. I mean as a reminder, just as a data point on X-TOLE, that study looked at 10 milligrams, 20 milligrams and 25 milligrams. And then after we unblinded, all 3 doses were statistically significant, a little more noise in the data at the 10 milligram dose, but a clear dose response among the 3 doses.

And when we did our detailed PK/PD modeling, we went forward to the agency that we thought the 2 best doses to test in Phase III were 15 milligrams and 25 milligrams and we didn't get any push back from the agency on our Phase III clinical trial design as it relates to dose selection. So, I think we need a similar amount of information from X-NOVA in order to go forward to really think about appropriate dose selection for Phase III, if that's the plan in MDD. So, let's stay tuned on that one.

Chris, do you want to walk through the placebo risk mitigation work?

Sure. So, there are several things that have been done to try to minimize the placebo effect in X-NOVA. First, as a reminder, all of the sites that are conducting this study are based in the U.S. And so there's been some evidence that that's one way to decrease the placebo effect. We're limiting the total number of sites. There's more than 6 that you're seeing on ClinicalTrials.gov. I don't think we would have been able to get to the number of patients that we did with such a limited number of sites. But we also wanted to keep that number limited to minimize the potential noise as you would increase the number of sites significantly.

The sites that were chosen were chosen because of their experience, both in terms of the Principal Investigator and, of course, the coordinator and the staff. The CRO itself plays a critical role in the conduct of these studies. And so they were chosen for a number of reasons, but obviously, expertise in major depressive disorder was a major driver there. Another thing that's been learned is you really kind of want to limit the number of assessments that these patients undergo and so the protocol is very much focused on what's most important with no sort of additional endpoints included. So, you want the patient to be in the clinic a shorter period of time to get the proper clinical assessments, but not overdo it and then have them exit and hopefully, avoid a placebo effect there.

The -- we're also using CT&I group at Mass General to evaluate these patients. So, you have sort of an independent assessment using the safer criteria just before randomization. And so that, that obviously, in some cases, leads to screen failure because of inappropriate patient selection up to that point. So, it's nice to have that sort of external validation the patient is appropriate. And then we're monitoring blinded data as well to make sure that nothing unexpected has happened in either at a patient level or a site level or, of course, at the study level for that matter. And that's one of the ways we know that we're not enriching a population of patients who have insufficient depressive symptoms at baseline. So, we're doing quite a bit, and hopefully, it will be effective.

Our next question from (inaudible) from TD Cowen.

I guess maybe a little more detail on the progress in the pediatric formulation would be nice, specifically what interactions have occurred with the regulatory agencies. What's left in order to begin to the open-label PK extrapolation study? And then, I guess, maybe looking a little more long term out, how are you thinking about incorporating the pediatric population to your overall regulatory filing strategy in both the focal and generalized epilepsy should those programs be successful?

So as we stated, not only -- we focus most of our comments on FDA, but we've had appropriate regulatory interaction, both in the U.S. and in Europe on our pediatric development plan. So, we believe we've got an agreement on the pediatric plans, which are required. So, these take place over multiple years and some of the early work that we're doing on the formulation development side, I'll come back to in a second and then adjusting the protocol of X-ACKT to go down to 12 years of age. So, to get into 12 years of age and above, we'll continue to use the adult formulation of the capsule in that population. As we get into younger population, obviously, we look at a pediatric formulation development.

So, we're doing that work internally right now and that's ongoing and will continue for us to get the appropriate formulation and have the appropriate stability. Before we can get into much younger patients, we're going to need to do juvenile tox work as well, which hasn't been completed yet. So, you can imagine there's a number of steps that happen over a number of years. So initially, we'll get into these patients in primary generalized down to age 12. We'll also then do some open-label work, as we mentioned, using the PK extrapolation rule for those first cohorts of patients that will use the adult formulation and then over time, we'll step down into the younger patients. But the pediatric development plan is a multi-year plan. It's not gating to any of our adult work and not gating to an NDA filing, but we do have agreement from regulators on what the expectations are on the overall timeline for pediatric development.

Our next question comes from Danielle Brill from Raymond James.

I have one on the quality of life benefits and your IEC abstract. Were the quality subscale scores observed in the overall group clinically meaningful? Or was it just the seizure-free group that demonstrated clinically relevant improvements? And how do findings like these compare to other antiepileptic drugs like oxcarbazepine.

So Danielle, I think it's best to wait just a few weeks from now when we have the IEC presentation. We've got 2 podium presentations and some posters at IEC. So we'll wait for the data to -- as you mentioned and we mentioned in our prepared remarks, there are some subscales of the QOLIE-31 used in epilepsy, including things like seizure worry and social functioning and medication effects. We're looking at those both in the overall open-label population as well as in the seizure-free population. We're looking at both sets of data. So, we'll be able to provide the entire data set in the presentation that's been drafted, but it's premature until that's been presented to go through the data on today's call.

Chris, anything to add overall on the quality of life work?

No. Come meet me in Dublin, and we'll go over everything.

Our next question comes from Marc Goodman from Leerink Partners.

This is Rudy on the line for Marc. So, for the X-NOVA trial, you already completed study enrollment and patients will be treated for 6 weeks, can you maybe provide more color on the timeline, how do you get to late November to mid-December for data readouts? And secondly, for the ongoing investigator-sponsored Phase II study at Mount Sinai, how important is that study regarding your decision to move forward?

Yes, happy to address these questions. So as we mentioned, the last patients have been enrolled in X-NOVA and what you heard in our prepared remarks is that the various last few patients are being randomized in the near term. So, you can think about kind of the last randomizations happening in mid-August. And then as we've talked about, it's a 6-week treatment. So that gets us to the end of September. Then there's a 4-week follow-up, which gets us kind of end of October into early November and then we have the steps of cleaning and locking, unblinding data analysis and then release. And so when we kind of add all that up together, our best estimate of top line data right now, as we've mentioned, is end of November to mid-December. So that's how all those time lines come together.

In terms of the Mount Sinai study, so yes, as a reminder, there is a parallel depression study ongoing with XEN1101. It's an IST, being run by 2 medical centers at Mount Sinai and Baylor. Our expectation is that, that study is not going to read out this year and so it will read out after X-NOVA. In terms of our next steps in terms of XEN1101 development, we're really focused on the X-NOVA study. So, we believe we'll have all the information we require to make our decision at the end of this year when the X-NOVA data are available. We won't be waiting specifically for the Sinai read out.

Our next question comes from Laura Chico with Wedbush Securities.

I wanted to ask about epilepsy enrollment trends in clinical trials and this is more of a high-level question. But obviously, there was some disruption during COVID. That's kind of gone away. But could you just talk about enrollment dynamics generally in the epilepsy space? Has it gotten better? Has it gotten more challenging. I guess I'm kind of curious if the introduction of newer therapies in the market has made it a little bit more challenging to recruit patients. Any thoughts there?

Yes, I'm happy to provide commentary and Chris, if there's anything to add on your side in terms of what we're seeing out in the field from our clinical operations folks and any color there. We've been pretty consistent in our comments that based on our experience, we have confidence in our ability to execute. And I don't think anything is going to hit us like we -- the challenges we had during COVID, right? We ran X-TOLE kind of pre-COVID in 2019 into early 2020. We have the study up and running.

And then we had a really significant impact of the early days of COVID, about a quarter to 2 where we enrollment completely fell off a cliff, and we weren't screening any patients. We were really just trying to maintain the patients in the study. And then we kind of almost had to pick the study back up again in the fall of 2020 and into 2021. And then our X-TOLE data were available in the fall of 2021. So, I don't think we're going to see any types of headwinds that we've had to see -- that we've seen historically. So, I think we're -- we feel comfortable and confident that we can adjust to anything that comes our way.

Chris, anything specific in terms of Laura's question around new drugs available and if there's any feedback from sites or investigators on any impact there?

Yes, sure. A few thoughts. I mean, first of all, you have a new drug, relatively new drug like Cenobamate and patient comes into the clinic is in need of something. There's going to be a an option to either enroll in a clinical trial like we have ongoing or to choose Cenobamate. If Cenobamate ends up getting chosen, and it works out, then they're not going to be eligible for the clinical trial. If it doesn't, it's going to take a little bit of time, right, to figure that out, especially considering how long it takes to titrate Cenobamate.

So, I would say that it has had some impact, I would say, just to build on what Ian said. I mean you think about what was pulled off by the team during COVID with the X-TOLE study, the environment certainly isn't as in much turmoil as it was 2, 3 years ago. If you take a look at Dr. Jackie French has an interesting article out just this month about increasing challenges in trial recruitment. One of the things she points out is that over time, each -- at the site level, they've recruited fewer participants at the site as you look over decades.

But if you take a look at the article, like the number that they're expecting per site, which is about 5, is fairly consistent with what we saw in X-TOLE. So, I don't think anything has changed considerably in that -- from that perspective since the X-TOLE study was completed. As a consequence of COVID, there are less people, it's hard to find workers. And so I do think that there are some challenges with sites being able to find the appropriate number of people and to have the support staff. We'll say that the sites that we have up and running are performing really well.

Our next question comes from Mohit Bansal with Wells Fargo.

And I can give you one more idea for your webinar. We would be happy to host your MDD Webinar at our conference in September. (inaudible) So, the question is, when we talk to experts, they say that having -- like there are other elements just more than efficacy, which could be important for epilepsy drugs, like broad therapeutic window, DDI drug interaction, ease of use, things like that. So, when you look at XEN1101 versus some of the successful versus unsuccessful epilepsy drugs out there, how do you rate or rank XEN1101 compared to these drugs that have been out there before?

And I think we would add other ones to your list as well, including novel mechanism. Ease of use can look at things like titration and monitoring and can have an impact from a DDI perspective. But Chris Von Seggern, we've done a lot of work here. So, why don't you walk through some of the market research in terms of prescribing decisions, overall efficacy, tolerability, but also some of these other attributes that we've had really positive feedback from physicians on.

And first and foremost, I think we would agree that a successful seizure medication in this space goes beyond efficacy. But what we hear from market research, first and foremost, is that physicians are excited about the efficacy that's been demonstrated coming out of X-TOLE and it's been highlighted as potentially best in category from an efficacy standpoint from a seizure reduction. But the real value attributes that shine for XEN1101 in the context of very compelling efficacy are those ease-of-use attributes at (inaudible) and we've highlighted a number of them, but physicians do lap on to the fact that the product doesn't require titration. It has a long half-life that potentially convertibility to miss doses. The lack of DDIs is something that is very frequently pointed out because of the frequency of use of multiple medications to manage these patients.

There are a number of attributes that really do shine and they are unique. But the novel mechanism itself because of that polypharmacy environment is one of them. And they're very excited about the Kv7 mechanism working in concert potentially with other products that are commonly used in this space. As we've continued to evolve our market research though, there are components that are emerging from our story, both with respect to the rapidity of onset that emerges because of the lack of titration and the ability for us to demonstrate efficacy potentially as soon as 1 week as well as the compelling open-label efficacy that have emerged in what is closer to a real-world population in that open-label extension from X-TOLE. The totality of evidence is really compelling and we hear that very consistently from our market research.

When you look now in transition to successful or less successful products in the space, those that are most successful, do have efficacy that's competitive and other ease-of-use attributes that align with some of the value attributes that XEN1101 has. And it's because of that component that we feel quite strongly and what we hear from our research is supportive that XEN1101 if approved is going to be a very meaningful player in this space.

The next question comes from Charles Duncan with Cantor Fitzgerald.

This is Elaine Kim on for Charles. Can you provide any color on the phenotype of the MDD patients involved in the X-NOVA study? And how does it represent the heterogeneous patient population?

So, is the question on the type of MDD patient looking at the -- is the question around just the baseline patient characteristics and demographics?

Yes.

Okay. Chris, do you want to go through just the entry criteria and obviously, us monitoring the types of patients that are coming in?

Yes, sure. So the -- so one of the things I mentioned in terms of keeping an eye on the study is to keep an eye on the blind data. And that's not only keep an eye on the safety and efficacy data, but also to keep track of the population of patients that you're enriching for. And so as you look at gender and age, disease severity and so forth, it's all sort of very much in keeping with what we would predict based upon other moderate to severe MDD populations, particularly with regard to sort of the cut-off that's being used for the MADRS you're translating into a moderate to severe population.

Do you have a specific aspect of the inclusion criteria that you want to understand better?

I understand that you also have an enrollment criteria for anhedonia as well. I know that a lot of depressed patients do report that, but other characteristics that you think would be meaningful for clinicians to focus on as well.

Right, right. So, I think that the most important thing, I'll get to the SHAPS in a moment. But I would say that the most important thing is really the cut-off and really the definition of moderate to severe depression being a 20 or greater on the HAMD-17. So that's one thing. Also have to make sure that the duration of the current episode is of sufficient duration. And then there is a cut-off on the SHAPS as well, which is the scale that's assessing anhedonia. And what we found in general is that by the time patients have the degree of depression that they get them in the study based upon the Hamilton cut-off that just about everybody has that same degree of anhedonia as well. And I think those are probably the most important criteria in terms of getting into the study.

And for our last question, it comes from Tim Lugo from Williams Blair (sic) [William Blair].

Ian, I'd love to hear an update on your views on commercialization. Obviously, X-NOVA is going to be a major variable on the value of the company. But is it going to influence your thinking around your ability to commercialize in epilepsy? You've obviously added some Board experience in commercialization but also in transactions. I'm just curious how use of you X-NOVA influencing your ability to take it alone into the epilepsy market?

So, I'll provide maybe higher level comments and then Chris Von Seggern can provide kind of more detailed commentary as he's thinking about the commercial plans in both indications, maybe starting with epilepsy, but we've done a fair bit of work on depression as well. In terms of the overall strategy of the organization, we've been consistent for some period of time. Our goal is to build a fully integrated neurology company. We do drug discovery. We have deep development capabilities and we want to forward integrate and have commercial -- have commercialization in the U.S.

That means that we're not going to commercialize in other jurisdictions. And we've talked about that, that at some point, although XEN1101 is a wholly-owned asset that we own [now] downstream economics in terms of royalties to anyone. At some point, we would look at ex-U.S. partnerships in terms of accessing those markets commercially. So, nothing has changed there. Obviously, a lot of our focus over the last couple of years is in preparation for commercialization in epilepsy, but we've done enough work to feel that we're comfortable that we could do it in depression as well. There would be a timing difference there, obviously, where we are in the epilepsy program that would launch first and we could step into commercialization and depression.

And Chris can provide a little bit more layers of detail from those comments.

Building on what Ian said, we spent the majority of my time since joining Xenon, preparing for commercialization here in the U.S. in the epilepsy space. And there are several examples of companies of our size and scale that have launched in the epilepsy arena with a meaningful commitment from a commercial standpoint, but also a very significant support from a medical affairs standpoint, to help with communication of the key data stemming from both our clinical trials and our supportive work.

Over the last several years, as we've executed against those plans, I think we have great comfort that we can be a meaningful player in this space, both with the team we've built to date as well as what we think will be required to successfully commercialize in the epilepsy arena, which is folks know a big but still a manageable commercial space with probably less than 10,000 prescribing epileptologists here in the United States. The advantage of adding X-NOVA data really goes in 2 directions. First, we can't lose sight of the fact that depression remains one of the most important comorbidities within the epilepsy space and that potential data supporting that patient population is something that's very interesting within the epilepsy arena.

But more to the point, there are examples of companies who are our size and scale, who've also successfully launched in major depressive disorder. Axsome is doing a phenomenal job right now with their early launch with a more targeted approach than what's been seen with past MDD products. So, both markets are here for us as we continue to build the addition of Gillian and Justin to the team from a Director standpoint, only enhances our planning and execution over the coming years.

This concludes today's conference call. You may now disconnect.