Xenon Pharmaceuticals Inc (XENE) 2021 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the First Quarter 2021 Xenon Pharmaceuticals Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker host Jodi Regts. Please go ahead.

Thank you. Good afternoon. Thank you for joining us on our call and webcast to discuss our first quarter 2021 financial and operating results. Joining me on today's call are Dr. Simon Pimstone, Xenon's Chief Executive Officer; Ian Mortimer, Xenon's President and Chief Financial Officer; and Sherry Aulin, Xenon's Vice President, Finance. As a reminder this coming June at the time of the Company's Annual Meeting of shareholders, Simon will be transitioning to his new role as Executive Chair of Xenon's board. At the same time, Ian will be appointed President and Chief Executive Officer, while Sherry will be appointed Chief Financial Officer.

Please be advised that during this call we will make a number of statements that are forward-looking, including statements regarding the anticipated impact and timing of the COVID-19 pandemic on our business, research and clinical development plans and time lines and results of operations, the timing of and results from clinical trials and preclinical development activities of our proprietary and partnered product candidates. The potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of our proprietary and partnered product candidates.

The anticipated timing of IND or IND equivalent submissions and the initiation of future clinical trials for our proprietary products and those related to other partnered candidates. The efficacy of our clinical trial designs, our ability to successfully develop our proprietary development program and the timing and results of our and our collaborators interactions with regulators, the timing and anticipated enrollment in our clinical trials, the potential receipt of milestone payments and royalties from our collaborators, our expectation of having sufficient cash to fund operations into 2023 and the timing and results of our and our collaborator's interactions with regulators the timing and anticipated enrollment in our clinical trials the potential receipt of milestone payments and royalties from our collaborators our expectation of having sufficient cash to fund operations into 2023 and the timing of potential publication or presentation of future clinical data.

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 first quarter financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investor Section of our website at www.xenon-pharma.com and filed with the SEC and on SEDAR.

Now, I would like to turn the call over to Ian.

Thanks, Jodi and good afternoon. Thanks everyone for joining us. I hope everyone is healthy and well. We have made significant progress over this past quarter and I'm excited to provide an update today as we enter a period of important clinical data readouts over the coming quarters. I'll focus on our 2 proprietary Kv7 programs XEN1101 and XEN496. Later in the call, Simon will update you on our XEN007 CAE program as well as partnered programs with academic and industry collaborators followed by a financial update from Sherry. We'll then open the call up for your questions.

So I'll begin with XEN1101 which is a novel NextGen Kv7 modulator being developed for the treatment of epilepsy and potentially other neurological disorders.

We are very encouraged about the compelling product profile that is emerging for XEN1101. In addition to my comments on XEN1101, Simon will provide some commentary on our work examining XEN1101 and indications outside of epilepsy. In the near term, our focus is on the upcoming data readout from our Phase 2b external study. As a reminder X-TOLE is designed as a Phase 2b randomized, double-blind, placebo-controlled, multicenter clinical trial to evaluate the efficacy, safety and tolerability of XEN1101 administered as adjunctive treatment in approximately 300 adult patients with focal epilepsy.

The primary endpoint is the median percent change in monthly focal seizure frequency from baseline, compared to the treatment period of active versus placebo. We believe that this is a well-powered and well-run study which gives us confidence in the integrity of the key efficacy endpoints as captured by the diary. I am pleased to report that we have now completed patient screening with the final patients now in the baseline period of the study. Patient randomization is expected to be complete in June was top line data anticipated by the end of the third quarter of this year. Given our current numbers already randomized and those last subjects and baseline, we expect we will randomize more than 300 subjects.

This upcoming data readout represents a notable inflection point for Xenon and an opportunity to drive XEN1101 forward into a late stage pivotal program. Given this importance, I'd like to expand upon the unique properties and potential advantages associated with XEN1101.

First some comments on the potential efficacy of XEN1101. XEN1101 is based on a previously proven Kv mechanism of action with broad anti-seizure activity we reported strong target engagement in our Phase 1b transcranial magnetic stimulation study. Interestingly from our interviews and research with KOLs and community health care providers. We understand that the efficacy of many anti-seizure medications is perceived to be roughly equivalent and that the other ease-of-use and tolerability attributes are important in prescribing decisions.

Therefore, if we obtain efficacy measures that are statistically significant and within the range of other anti-seizure medications, there are a number of other positive attributes of XEN1101 that we believe could be further differentiated within the adult focal epilepsy market. We believe that XEN1101 has the potential to address some key ease-of-use considerations for physicians and XEN1101's Kv7 mechanism would represent the only drug in its class available on the market.

From our discussions, we believe that this unique mechanism of action and currently apparent low DDI risk may be leveraged in a rational polypharmacy approach. We believe XEN1101's one pill, once daily dosing may be attractive to both physicians and patients with a forgiving PK profile that may provide coverage for missed doses.

Additionally, no drug dose titration is envisaged which compares favorably to the majority of other therapies used to treat adult focal seizures. Further given the ASMs are generally perceived as having non differential efficacy, the safety and tolerability profile is another key treatment driver. XEN1101 was reported as safe and well tolerated in a Phase 1 clinical trial. When taken as an evening dose, the drug Cmax has reached during sleeping hours and thus patients may avoid some Cmax related CNS AEs.

Additionally, based on the lower-than modeled dropout rates and high conversion to open-label extension in X_TOL, we have further reasons to believe that XEN1101 could have competitive, safety tolerability properties.

Digging in a little deeper into the potential mood benefits of XEN1101. We have strong scientific rationale to further explore major depressive disorder or MDD based on pre-clinical data and clinical work to date that supports the use of Kv7 modulators for the treatment of depression and anhedonia. If XEN1101 could present a mood benefits, beyond its impact on seizures, this added positive effect would also be a key differentiator and if XEN1101 has a good safety and tolerability profile without psychiatric AEs, this too could potentially encourage of use. On the whole taking into an account our conclusions from preclinical studies and clinical results to date, along with the market research exploring the current gaps in the adult focal epilepsy space, we believe XEN1101 has a product profile that could be meaningfully differentiated from other anti-seizure medications.

Turning now to XEN496, which is a proprietary pediatric formulation of the active ingredient ezogabine that we're developing for the treatment of KCNQ2 developmental and epileptic encephalopathy or KCNQ2-DEE, a rare, severe pediatric neuro developmental disorder. Now in Phase 3 development, XEN496 represents our most advanced program in the clinic, and we have received fast-track designation and orphan drug designation in the U.S. as well as orphan medicinal product designation from the European Commission.

Our Phase 3 EPIK clinical trial is evaluating the efficacy, safety and tolerability of XEN496 administered as adjunctive treatment in approximately 40 pediatric patients age one month to less than 6 years with KCNQ2-DEE. Designed as a randomized, double blind, placebo-controlled, parallel group, multicenter clinical trial enrollment is underway. Our team continues to collaborate with KOLs, physicians and patient advocacy groups to identify potential patients. We recently hosted a webinar in partnership with the KCNQ2 Cure Alliance Foundation, which feature Dr. John Millichap, our principal investigator of the EPIK study who outlined the study details and answer questions about the clinical trial from the families of the KCNQ2-DEE patients.

Based on its Kv7 mechanism of action as well as published physician case studies, we believe that XEN496 has the potential to address an important unmet medical need for these young patients and we look forward to keeping you updated on the progress of the EPIK study.

At this point, I'll ask Simon to provide an update on our work with academic collaborators and industry partners, including the investigator-led studies with both XEN007 and XEN1101. Simon?

Thank you, Ian. This is an exciting time for Xenon as our partnered and proprietary programs continue to make great progress. As you had mentioned, we are exploring other neurological indications for XEN1101 outside of adult focal epilepsy. I wanted to highlight for you today the recent cost at all article published in the American Journal of Psychiatry examining the use of ezogabine on the reward circuit activity and clinical symptoms of depression in a randomized clinical trial. Ezogabine compared with placebo was associated with a significant improvement in depression, as measured by the Montgomery-Asberg Depression Rating or MADRS scale and associated with a significant improvement in anhedonia capacity as measured by the Snaith-Hamilton Pleasure or (SHAPS) scale.

We believe these new data provide further validation of the great potential of the Kv7 mechanism to differentiate from other anti-seizure medicines in patients with epilepsy and the comorbidity of depression or a standalone to treat MDD. We recently announced a collaboration with the Icahn School of Medicine at Mount Sinai, New York and we expect that an investigator sponsored Phase 2 proof-of-concept randomized parallel arm placebo controlled clinical trial examining XEN1101 as a treatment for MDD, and anhedonia as measured by specific functional and clinical endpoints will be initiated in the coming months.

In parallel, we are planning a company-sponsored study in MDD focusing on clinical endpoints. Both of these planned MDD studies are supported by promising preclinical data with XEN1101 as well as clinical data generated from open label and randomize placebo controlled studies that explored targeting the Kv7 mechanism using ezogabine as a potential treatment for MDD. We're excited about this focus on the potential of the Kv7 mechanism and the related promise for XEN1101 to be the only-in-class drug in adult focal epilepsy with the potential for broader opportunities in other neurological disorders given XEN1101's unique pharmaceutic attributes.

Turning now to XEN007, which is a CNS-acting Cav 2.1 and T-type calcium channel modulator being studied in treatment resistant childhood absence epilepsy or CAE in the physician led Phase 2 proof-of-concept study. At the virtual AES 2020 meeting, we presented promising interim data from a small number of patients that showed 3 CAE subjects exhibiting a significant reduction in seizures as measured by seizure diary and confirmed by EEG and while this is a small data set, we believe we are seeing drug activity in seizure reduction that is supportive of a broader development plan for XEN007.

As we have stated previously, the COVID-19 pandemic has impacted recruitment in this investigator-led study. However, we are adding other sites and we expect to be able to provide results from a larger dataset in the second half of 2021. I'm pleased that our industry-partnered programs also continue to advance and progress. Our collaborator, Neurocrine Biosciences continues to guide the initiation of 2 Phase 2 clinical trials this year to evaluate the use of NBI-921352, which used to be called XEN901 in both pediatric and adult indications with planned studies in patients with SCN8A developmental and epileptic encephalopathy of SCN8A-DEE and in focal epilepsy respectively.

In addition, we continue to make good progress on the advancement of earlier stage molecules within our ongoing discovery based collaboration with Neurocrine. We're also excited to report that our partner Flexion Therapeutics recently announced treatment of the first patient in a Phase 1b proof-of-concept trial, evaluating the safety and tolerability of FX301 administered as a single dose popliteal fossa blocking in patients undergoing bunionectomy. Flexion's FX301 consists of Xenon developed molecule, previously known as XEN402, which has been formulated for extended-release from a thermosensitive hydrogel. Flexion has guided that it anticipates data from the Phase 1b trial of FX301 in late 2021.

I'll now ask Sherry to recap, our financial position. Sherry?

Thanks, Simon. We are in a solid financial position today and I believe we are well situated to support Xenon's business objectives and the investment of our clinical development programs. Today, I will focus on some highlights from this quarter's financial statements and we refer you to our news release and 10-Q report for further details.

Following up on Simon's comments on the progress made by our partner Flexion, this quarter we recognized $3 million in milestone revenue and we are eligible to receive additional milestones and royalties in the future. This past quarter, we also closed and oversubscribed $115 million public offering with strong support from both existing and new high quality institutional investors.

Cash and cash equivalents and marketable securities as of March 31, 2021 were $274.7 million compared to $177 million as of December 31, 2020. Based on current assumptions, which include fully supporting the planned clinical development of the XEN1101 X-TOLE trial and MDD proof-of-concept study, the XEN496 EPIK study, the XEN007 physician- led proof-of-concept study as well as funding our preclinical and discovery activities, we anticipate having sufficient cash to fund operations into 2023 excluding any revenue generated from existing partnerships or potential new partnering arrangements.

We plan to revisit our cash runway guidance post actual data with increased visibility on our spend in 2022 and beyond. With our strongest balance sheet to date, we continue to have a lot of flexibility as we manage our business and continue to advance our product candidates. As of March 31, 2021, there were approximately 41 million common shares outstanding, $1.1 million pre-funded warrants and $1 million Series 1 preferred shares outstanding.

I would refer you to today's press release and our 10-Q filing for other specific details from this quarter's financial statements. At this point, I will turn the call back to Ian who will summarize the key milestone events, we are anticipating for the remainder of this year. Ian?

Thanks, Sherry. Looking ahead, our key corporate objectives include the continued advancement of our EPIK Phase 3 clinical trial in patients with KCNQ2-DEE. The development decision and results from a larger dataset in the second half of the year from the physician-led XEN007 proof-of-concept study in CAE. Continued support for our partnered program with Neurocrine Biosciences included in the anticipated initiation of 2 Phase II clinical trials with NBI-921352 in 2021.

Results from Flexion FX301 Phase 1b trial anticipated in late 2021.Anticipated initiation of an investigator-led Phase 2 proof-of-concept study as well as the ongoing planning for a company-sponsored clinical trial examining XEN1101 in MDD and importantly, within our XEN1101 Phase 2b X-TOLE clinical trial, we expect patient randomization to be complete in June with top line data anticipated by the end of the third quarter of this year.

In summary, we are incredibly proud of the breadth and depth of our neurology pipeline. There is an immense amount of momentum in both our proprietary and partnered programs. For the first time in Xenon history, we can have up to 8 clinical trials underway with 5 different molecules led by us, our corporate partners and academic collaborators in 2021.

Before we open the call up for your questions, Simon has a couple of concluding remarks. Simon?

Thank you, Ian. So this is my last quarterly call as Xenon CEO. As you know I'm handing that turn over to Ian who has worked alongside me for the past 7 years. I'll leave this role with great anticipation and optimism in part driven by the strength of our current pipeline, in part driven by the exciting data readouts ahead of us and in part driven by the strong leadership at Xenon that will continue to work tirelessly for you, our shareholders as well as the patients' communities we serve. It's been a privilege to serve such a talented executive team and to work alongside such wonderful colleagues. This has been an incredible honor and mission for me, a journey always treasure.

As you know, I'll be working in a different capacity as Executive Board Chair and in that capacity, I look forward to continuing to support Xenon and to interacting with all of you. I wanted to thank you all for the faith that you have shown in me and the faith you've shown in Xenon. I firmly believe that our best is yet to come. I'll now ask the operator to open the line for any questions. Operator?

(Operator Instructions) Now first question coming from the line of Paul Matteis with Stifel.

Paul, can you hear us? Operator, perhaps we go to the next question just while Paul drives to solve the technical issue. Operator?

And our next question coming from the line of Laura Chico with Wedbush Securities.

Best wishes Simon and congratulations to Ian and Shelley again. I guess I have one question on 1101, so obviously exciting to hear that the actual readout is coming up in the third quarter. Beyond the primary endpoint, I'm wondering if you could talk about the communication strategy around some of these products, non-seizure related, assessments of quality of life measures, and then I just have one follow-up for you.

Maybe I'll answer that by providing a little bit of background and color.so as we mentioned, we will have top line data by the end of Q3. That will be by way of a press release. We will have key endpoints. We haven't mapped out everything that will be in that first press release. It will come after we unblind data, just how much of data analysis we can do balancing, getting out that top line data, in as quicker manner as we can. Key efficacy endpoints primary and secondary for sure, the primary we talked about on today's call. Key secondary endpoints focused on a lot of the responder analysis and we'll have some data on those. We'll definitely comment on safety and tolerability and some other metrics within the study. And as you mentioned, we do have some additional endpoints around quality of life. How much of that full data analysis will be completed and ready for the top line data, we don't know right today, so we will be ready to talk about that at the next quarter in advance of data and then as a standard, we will have more detailed analysis upcoming at scientific meetings, we may be able to get just under the wire for a late-breaker at AES this year, which would be excellent, and then obviously we have AAN next spring, our conferences that we're looking forward to presenting additional analysis.

That's great. And then maybe one follow-up on the commercial market in the focal epilepsy setting. It's been about a year since a corporate has been on the markets, obviously there'll be some additional studies to conduct with 1101 as successful here. But I'm just curious if you could talk about any learnings or takeaways that you can take from cenobamate year on the market.

Yes. It's Simon. I'll make a comment and hand over to Ian for some additional color. Yes, look, I mean just as conjecture, I'm not going to give you a perspective from a detailed analytical review, but it looks cenobamate certainly has shown at it's final dose to have a good effect size in the proportion of patients with this condition. It is a significant titration required to get there, 3 to 4 months of dose titration and so I think what needs to still play out in terms of the real world usage of the drug is really how well that can be integrated into a refractory focal epilepsy patient population. These are patients that are having regular seizures and having 2 ways. This amount of time to get drug to a final concentration required for maximal effect, I think we'll have some limitations and it's one of the key differentiators with 1101, we don't need to titrate the drug and we appear to reach a maximal steady state exposure and around plus or minus 2 to 3 weeks with no long-term accumulation. So I think that's a really significant differentiation of course we've not seen any of the hype eosinophilic syndrome that was observed in studies with higher dose Xcopri in our studies to date and we don't have any reason to believe we will, but of course the dose titration differential, I think is going to be very, very important. Ian refer to the ease-of-use and once-a-day, I think both of those are going to be very, very important differentiating concept and I think you can look to a drug like of Vimpat or lacosamide which is far less effective in terms of medium seizure frequency reduction 35% to high 30% in medium seizure versus plus or minus 50 with Xcopri yet is selling about $1.5 to $2 billion a year largely because of its ease of use in this indication. So I think that's some of my own personal color. Ian?

Yes. Maybe just a couple of comments. So we don't have perfect information on your specific question on how the launch has gone for Xcopri, but our understanding, it's gone reasonably well. And obviously this is a large market opportunity, we're still significant unmet need where there is absolutely room for a number of branded drugs to do well. I think Simon walked through a lot of the differentiating points. The other thing that I would mention that we didn't cover on this call but we have presented recently is that we've generated some really nice preclinical data of 1101 in combination with cenobamate. Obviously different mechanisms of action and when you dose these drugs together, you can get quite significant efficacy in the in vivo models that we've run. So we look forward to having 1101 as another drug available for physicians and their patients.

Now next question coming from the line of Paul Matteis with Stifel.

Well, first off, congrats. Simon, and congrats Ian on your new roles, always appreciate the dialog we've had. I wanted to ask a question on the MDD plans and then also on the 07 plans. On MDD, what's your kind of current thinking on when you're going to engage the FDA, what the next study could look like, and how are you thinking about dosing in MDD, is it same as epilepsy, might you try to go a little bit lower due to just tolerability dynamics and then for 07, I guess similar question, just plans to engage the FDA, would you do that after this initial investigator data, would you start before and how do you think about next steps?.

Sure. I will start, Paul and then Simon can add. So on the MDD side, we don't believe we need any upfront engagement with the agency to move ahead with a company-sponsored MDD. So we're not looking for any specific feedback, obviously we need to follow protocol and get up and running, but there is not specific feedback that we're looking for, I think with the ezogabine experience from Dr. Murrough and his group at Sinai and other trials that have been run in MDD, we have a pretty good protocol synopsis already that we're working on. We are looking to use -- we haven't finalized the dose, but we'd be looking to use a dose that we're currently using in the epilepsy study where we just have a lot of experience. That said, from just an order of events perspective before we start the MDD study, the Sinai study will start before. The Sinai study will start and then we'll have the X-TOLE data. So we will have some information on unblinded X-TOLE data of 1101 before we initiate the company sponsored MDD study. So that is another data point that we can take into consideration as we refine our thinking. On 007, our plans are really in parallel. So this year is both to expand the dataset from those few number of patients where we saw some intriguing data at AEs last year. So that's the goal for the second half of the year and then in parallel, we do expect to have some regulatory interaction to talk about next steps in the development and obviously our planning, yes, if the data continues to support it in CAE is to run company-sponsored development, exactly what that looks like is really what we're doing in terms of our development planning right now and then we expect to have that regulatory interaction later this year.

Paul, it's Simon. The only thing I'd add is, just going back to the MDD, key distinctions I guess from the ezogabine study and also from the current study. Dr. Murrough run with 1101 is -- in those studies functional MRI was the primary endpoint with clinical secondaries, we're much more interested in our sponsored study as clinical primaries. I think the other unknown at this point which will define still is going to be the interplay with anhedonia in our sponsored study. So as you know the ezogabine study was done in MDD, and then anhedonic patients and will similarly be tested with Dr. Murrough's 1101 trial. We are currently sort of looking through that to decide where we will have a pure MDD patient population meeting thresholds of severity in terms of inclusion. I think that's the only additional comment I would make.

Our next question in queue coming from the line of Marc Goodman with SVB Leerink.

Yes. Simon, in the past you kind of hinted at work that's going on behind the scenes, you're talking about disclosing some of that work soon. I was just wondering are we getting closer what's going on behind the scenes, maybe you could just give us a little hint?

I mean you're probably referring to what our non-clinical programs, Marc. Yes, look we have some very exciting work underway, some of which we've talked about in the past. We do have a Kv7 program that obviously is looking at next generation molecules, which has made outstanding progress. We have a Nav 1.1 program targeting (inaudible) and potentially other indications, which is also made some very exciting progress. And then we have a few other programs in addition, which we aren't yet ready to talk about, but certainly over the coming months (inaudible) a bit more. So this is really just a stage of the programs, Marc, we'll make disclosures when we think that really move to a material stage and up until then, we'll keep the programs under wraps and those are just 2 of the programs we have referenced in the past, there are others, but that's about what we'll cover for now.

And then just one quick follow-up from a previous question, it's 2 about 007. When -- I guess, how many patients do we have right now that's already been enrolled and how many is the goal for this year?

Marc, it's Ian. So we haven't just like any other clinical trial that we run, we don't give updates kind of quarter-to-quarter on where we are in enrollment only when we had kind of key inflection points. Our goal is -- we've always said that the first 3 patients, the data looked really intriguing and if we could get to kind of 10 plus patients and then continue to enroll patients in the study in that population as we get more and more subjects in that study, it just gives us more confidence and that opportunity and that indication. So the goal was to increase from the handful into double digits and then grow from there.

Our next question is coming from the line of Tim Lugo with William Blair.

Congratulations to the team as well on the new roles. Going back to 1101 and MDD, I believe the Mount Sinai study is going to take relatively long to enroll given the NIH's role in the study as well. Can you just talk about maybe the company's sponsored study and how that might, I assume that should be faster to conducting especially if you're using clinical endpoints versus FMRI.

Yes, that's right, Tim, the way we think about it and you're probably referring to the clinicaltrials.gov posting from Sinai that study may take a few years, I think unknown right now and hopefully as that study gets up and running, we can get a little bit more granularity on when we may see top line data, but our expectation is that the Sinai study will start first, our study would follow, but our study would likely read out first and really for the reasons that you talked about primarily Sinai is going to be at 2 centers, we would go to more than 2 and with our control with the CRO that we would likely enroll more aggressively than the Mount Sinai study.

And I guess given the low DDR risk and epilepsy, have you explored kind of adequate DDi information for similar classes, you've MDD as well or with that all or have done kind of concurrently the epilepsy DDI information.

So we've done -- I would -- where we are in development for 1101. We haven't completed all of the DDI work that would be required. We've done standard DDI work regardless of therapeutic indication. So a lot of the in vitro work and other profiling that we believe overall it's going to have low DDI risk. The Mount Sinai study, this is dosed as a single agent. We haven't made a final decision on our MDD study on whether there'll be Con-Meds or not. But overall, the profile of 1101, we believe it has low DDI risk. We're also initiating more detail PK-PD modelling with the initial dataset being the clinical data that we've generated to-date in Phase 1 to start building that model. But once we have all of the Phase 2 actual data in hand, then our PK-PD modelling can become more robust and we can see if there is any differential exposure from 1101 or other Con-Meds depending, all of the patients on Inex store will be on those background therapies. And so we'll be able to have a better understanding of any DDI as we generate more data and do more modelling.

Our next question is coming from the line of Andrew Tsai with Jefferies.

Big Congrats on the progress as well. For the external study, very nice to see that it's wrapping up soon. So can you talk about what you would construe as positive safety data. I mean presumably you will show AEs in the top line, but will you, for example, a share biomarker data or other measurements like eye exams, chromaturia and so forth. Can you just talk a little bit about that?

Yes, Lucas -- as Ian said, Andrew, we haven't nailed exactly what's going to be disclosed in the top line yet. So of course sort of high level safety, tolerability will be, I think we need to think this through carefully, we obviously recognize there are certain safety, tolerability data sets which are going to be very, very relevant. We understand that. Some of that I think will be particularly important over time. So eye measurements are being done obviously year-end is being looked at, urinary hesitancy and or retention of course is being captured if any has occurred and so we will have that data, I think Ian made the point earlier, which I think is always the point in top line is balancing the speed to present with that material information in hand with the amount of data analysis, one needs to do and so typically we would do these stage releases driven by at least having this top line material data in hand, press release that as Ian said, with the press release and then follow up with a number of what we know are important analytics, which will come between now and then and AEs as you're likely time point. So hard to pinpoint exactly at this point what's going to be in that, that first press release, Andrew, but we'll, we'll come up with a plan as well. Ian said I think before data, after the second quarter will probably be in a position to upload and trust that you download on what is exactly going to be presented.

That's very clear. And my second question is actually back at the ASN Conference. I believe one of your team members affirm that a handful of patients had completed the open label phase. None of them had seen any safety issues, if that's true. I'm wondering if there have been more patients who have completed the open label phase and the safety profile still looks pretty pristine as you had expected.

Yes, I mean we -- I won't make any systemic comments on safety. I will confirm. So the way the study on the open label extension -- the way the study was designed initially as we know it's an 8-week double-blind with the opportunity for every subject regardless of dose group, or what placebo to go on to open label extension and we've said we've had a very high conversion rate into how well leave at a single dose, which is 20 milligrams and OLE was initially designed as 12 months, which is quite standard. We have started at the end of last year and into the early part of this year as patients were rolling off of 12 months, we had questions and asks from physicians and steering committee members for a continuation of the open label extension and we did that and we extended OLE to 3 years and we've gone through a number of key regulatory filings to extend that. And I think where that maybe to link back to your earlier question, I think where some of that long-term safety data is going to be important. Is your question around some of those safety events that showed up with ezogabine after cumulative dosing over a longer period of time. So the more data that we can collect for patients going out more than a year or multiple years when we talk about pigmentation risk. To be clear, the position from us at the company is we don't believe 1101 has any pigmentation risk, but the more data that we can generate and release over time from open label extension is going to be important for a number of our constituents.

(Operator Instructions) Our next question coming from the line up Serge Belanger with Needham.

Couple of questions for me, the first one on 1101 more specifically the MDD program, just wanted to clarify something. You plan on initiating the company sponsored study before you get results from the physician study. And at this point, maybe I missed this in prepared comments, but it's going to be open label or placebo controlled in dose ranging and then secondly on the 496 EPIK trial, I think it's too early to give an enrollment update here, but maybe just give us an idea of how many sites are up and running and maybe with COVID restrictions, has that been serious impediment to enrollment and should we expect significant improvement once restrictions are lifted.

So on the MDD question, so from an order of events, yes, we expect the Sinai study is ready to be up, that all -- that study will start in the near term, so that one's ready to go and then, yes, our current plan is to initiate a company-sponsored MDD study in advance of that physician sponsored Mount Sinai readout and in the commentary we made in Q&A is that our expectation, although we can't predict with certainty today, but our expectation is that we have a readout of our study likely before the Sinai readout, would be the likely order of events. You also had a question, just on that trial design. We're still -- we have a protocol synopsis. We're still in the planning stages of that study, but we would expect it to be a randomized study with placebo control, maybe not dose range finding, we wanted to answer a number of questions in the X-TOLE study around dose, dose response, minimum effective dose where it's likely and a proof-of-concept study in MDD, we would choose a dose in a placebo-controlled study. Moving to EPIK, so the study is up and running. So this is actually on 496, the Phase 3 program and we have kind of what we've said in the past and we don't get kind of granular on specific site numbers, but we expected it starting in the U.S. that really for the first few quarters of this year is when we were looking to get a number of sites up and running in the U.S. and then other jurisdictions outside of the U.S. would come online as the year progresses. So we're still on track for that. I would say there is probably been some COVID impact, we do hear from sites that some of them have been and that's probably lessening over time, but they have been focused on either COVID clinical trials or sites that have just been busy dealing with the pandemic and dealing with COVID patients. So it's likely had some impact, it's always difficult to know exactly how much, but that some of the feedback we have received and that we've also mentioned as we got a couple of quarters enrollment that's when we'll be in a position where we feel comfortable, trying to give some top line guidance on when we should see data from that study.

Our next question coming from the line of Yatin Suneja with Guggenheim.

This is Eddie on for Yatin. So just a high-level question on the 1101. How should we think about the potential efficacy coming next quarter in comparison to the old ezogabine data, do you need to show an enhanced efficacy profile over those older data or is it really just a story about safety and dosing regimens. How should we think about those top line data.

Yes. So Eddie, it's a good question. It's a question we often get and we did design the statistical analysis plan and the powering for the study, taking into consideration the ezogabine data. We know ezogabine, same mechanism, the data that ezogabine generated over a decade ago on adult focal epilepsy was statistically significant and was impressive. And so that was data that we've looked at and thought about as we've put in our assumptions into the modeling and the powering calculations. We've taken that into consideration. That said, it's ezogabine being or Potiga is no longer commercially available. It's on in the market. This isn't an active comparator -- our -- and the treatment and the drugs that are available for these patients are different today than when ezogabine was trialed. And so overall, although I think that that's a backdrop that we think about, I don't think we need to necessarily compare to the ezogabine data we want to compare to where 1101 is going to fit currently in the anti-seizure market, both from an efficacy point of view, but importantly as we talked about a lot on today's call and we've done a significant amount of market research is on the safety and tolerability profile and the ease of use attributes.

And then just one really quickly on AE profile. In the Phase 1, you did show some mild cognitive effects. I was wondering if that's something that you think could be exacerbated in a larger study that we can particularly concerned about.

I'll take that, Simon, Eddie. Yes, look any Phase 1 study with a CNS-acting drug in volunteers is likely to exaggerates the tolerability of the drug. When you go to a community-base study in patients, on an outpatient based study, it's generally very, very different. These are patients that are used to taking or more used to taking anti-seizure meds. Remember, these individuals in our trial had been on many, but are on 1 to 3 additional meds at the time of inclusion. So they are quite used to the tolerability and we have also, as you probably recall designed the study such that with dosing in the evening, which was different from our Phase 1 setting, which were the dosing was in the morning, but dosing in the evening in this trial as Ian mentioned in his notes earlier, we should see Cmax during sleeping hours and that was specifically designed given the PK of the drug to allow for any of the more significant CNS tolerability issues to hopefully be slipped through. And so we don't expect the AE profile to be the same as Phase 1. I will just say and reiterate that actually the Phase 1 safety was relative to other drugs actually good and relative to ezogabine was excellent. I mean we had almost all way mild and that were reversible and clearly a dose dependency with the aggregation of AEs of the 25 mg dose. Remember our -- that the study is dosed at night and in a patient populations. So our population is quite distinct and we expect to see much improved tolerability. I think Ian mentioned earlier, the very low dropout rates and the very high conversion to OLE would suggest that at least the patients are tolerating a drug to a degree where they stay in the study and move into the open label with the investigators know, they're getting the active drug.

And then just one final one, is there any possibility that this Phase II could be potentially pivotal that being considered and then, if it's successful like, do you have a baseline assumption on how many other trials you need to get approval.

It's a good question. We don't know because it's going to require an FDA discussion, but certainly if the study is very significant. maybe it's one-sided Phase 2 trial. So we'd have to essentially double the effect size in the terms of the P value for this to potentially be deemed significant at a two-sided which will be a requirement for this to be deemed registration, but assuming we were to see that, in other words a P less than 0.025 rather than less than 0.05, we would certainly engage the FDA on that discussion and then of course the obvious discussion is do we just require one additional for the U.S. at least, one additional Phase 3 trial for Europe, it's almost certain one would require 2 distinct studies, 12 weeks dosing designed as two-sided. But for the U.S., it is possible that this could be deemed a registration or should we say one of 2 registration trials. Remember, we still have to have a certain number of subjects in a safety database and that numbers around 1500, but they don't all have to come from efficacy trials, they can come from confirmed studies, open-label study, single-dose studies, et cetera. So we're going through that Eddie right now but our goal would be to engage the FDA on that exact discussion if we see a highly statistically significant effect.

Our next question coming from the line of Antonia Borovina with Bloom Burton.

I just have one, which was kind of related to a question asked earlier by media in another way of asking it. So I know that your actual trial is powered to show a 15% delta between placebo and active. So I'm just wondering if you just reach this threshold. Do you believe that this is competitive commercially from an efficacy perspective?

Yes, I mean that's a difficult question to answer, because I think in all of these things, any prescribing decisions based on totality, it's not just based on a single data point and it's interesting when you, when you talk to a lot of the community-based prescribers, I'm not sure that they can rattle off clinical trial efficacy data like we can write. So they're really thinking about the experience, they've had with a drug, how their individual patients have done on that drug, what the characteristic of that patient is and the prescribing decision that they're making, so I would never want to think about one single data point as being a driver of the ultimate commercial success for this -- for 1101. I would also say, yes, the statistical -- it's a well powered study from a statistical perspective to show, It's a linear trend test to show a dose response and separation. And if you look at your proactive the placebo versus the high dose of 25 milligrams, the modeling is a 15% differential. Obviously, that -- a bunch of other things go into that model at the end of the day in terms of the standard deviation and other things that would provide the P-value at the end of the day. So the way we think about it is if we're in that range of that 30% to 40% median reduction, we need to be statistically significant, then we believe we're absolutely comparable to what the market is for efficacy and anti-seizure medications. And then when you start thinking about some of the other attributes which are really a massive driver of how decisions are made 1101 as you line it up against the other drugs, both generic and branded drugs in adult focal epilepsy, that's where 1101 lines up really well and I won't list those offering now but we have gone through those in our prepared remarks, where we believe both on an ease of use and safety and tolerability so far 1101 looks very strong.

Our next question coming from the line of David Hoang from SMBC.

So I just had a couple of quick ones. With 1101, I know the inclusion criteria for the Phase 2b study allows 1 to 3 contemplating or background ADDs. So I was just wondering if you had a sense of how many patients are actually on only one background therapy, and in the real world setting, do you think that you'd be able to pick up some patients in second line usage or would it mostly be third line plus that you expect.

Good questions. We don't have, neither Simon nor are in the details of exactly what the patient demographics looks like in the current study. we purposefully tried to stay away from that. So I don't know the answer today of your question on how many are on 1, 2 or 3 background meds in the study, obviously we'll be able to disclose that data once the trial is complete. When we think about the prescribing decisions. I mean why don't we just spend a quick minute walking through them because we've done a lot of this work recently. So generally, yes. at first line, many of these -- so first line meaning newly diagnosed patients. They are going to be on a generic drug. At second-line, you're going to -- you often see branded Keppra show up and again not every patient is the same and not every physician prescribing habits are the same, but you often see branded Keppra show up or other generics and at that point still we see a percentage of patients often it's quoted in the 30% to 40% range, that are still not well controlled and that's when physicians are starting to think about rational polypharmacy that's where Vimpat often shows up as the first branded agent. And I think we believe that's where 1101 based on its attributes also has the opportunity to play a role based on, it's going to be the only-in-class drug at launch with a Kv mechanism. So it'll be a novel mechanism and some of the other uses of use attributes that we've seen and obviously once we have the safety and tolerability and efficacy data in hand, but that's generally as we think about the progression of our patient and potentially where 1101 could fit in there or has additional agents are added to treat these patients.

And then just my question was on 007. I know the active ingredient is flunarizine and there has been some experience commercially with that molecule so just trying to get a better sense of what has the experience historically been 007 or flunarizine in terms of safety, tolerability and efficacy and such.

So it's approved on label outside of the U.S. and a number of countries, European and South American and others for chronic migraine prevention and vertigo, it's a CNS acting primarily calcium channel modulator, but it has some other effects. And one of the actual very interesting features of the drug, which was compelling for us is not only had there been some non-clinical data supportive of use in CAE, but actually the tolerability of the drug, particularly in the pediatric population is actually very, very good. So they are some side effects known with flunarizine particularly in an elderly population, depression and pyramidal -- extrapyramidal features can be observed again at low frequency, but in the elderly I'd say the only AE outside of that population that one would need to consider is some weight gain. It's not that significant, but it is there in some subjects, but interestingly in the pediatric population, this drug is very, very well tolerated, which is actually very important because often drugs used in kids for their seizure control independent of type of seizure. This could be focal, this could be generalized, this could be absence. Often these are -- often drugs that impair the scholastic ability of these kids that have cognitive impairment and kids feel sleepy and so this is a drug, which appears to be mostly devoid of those certainly relative to the gold standard drugs in this indication being valproate and ethosuximide. This would be a very good alternative from a CNS perspective. So it's actually one of the reasons, David, we wanted to move this product forward in this population was because of the predicted excellent safety, tolerability, that's now been shown in tens and tens and tens of thousands of users of flunarizine around the world. This is another way, if the drug fails, I don't think it's for safety, tolerability, that would be my guess in this population. I think we don't -- obviously we don't know the final efficacy, albeit it looks very good in a small subset but safety, tolerability is well understood.

I'm not showing any further questions at this time. I would now like to turn the conference back over to Jodi Regts for any closing remarks.

Thank you on behalf of the Xenon leadership team. We look forward to updating you on our progress over the coming months. Operator, we will now end the call.

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.