Xenon Pharmaceuticals Q1 2024 Financial Results and Corporate Update

Xenon Pharmaceuticals Inc., a biopharmaceutical company specializing in neuroscience, reported significant progress in its clinical development programs and financial results for the first quarter ended March 31, 2024. The company, listed on Nasdaq under the symbol XENE, is making strides in the treatment of epilepsy and major depressive disorder (MDD) with its promising drug candidate, azetukalner, also known as XEN1101.

Azetukalner has recently been approved by the United States Adopted Names Council and the World Health Organization's International Nonproprietary Names expert committee as the generic name for XEN1101. This approval marks a substantial milestone for Xenon, highlighting the drug's novel Kv7 mechanism of action. Ian Mortimer, Xenon's President and CEO, expressed enthusiasm about this development, noting it brings the company closer to commercializing azetukalner.

In the realm of major depressive disorder, Xenon has made commendable progress. Following favorable interactions with the U.S. Food and Drug Administration (FDA), the company is set to initiate its Phase 3 program in the latter half of 2024. This decision is supported by compelling data from the Phase 2 X-NOVA clinical trial, which showcased azetukalner's potential to address not only depression but also anhedonia, a frequent co-morbidity. The drug’s unique mechanism of action could offer a competitive edge in treating MDD.

Additionally, Xenon has actively engaged with the medical community, presenting at the American Academy of Neurology's annual meeting. The presentations were well-received, particularly among neurologists and epileptologists, who are excited about azetukalner's potential in both epilepsy and MDD. The company plans to continue presenting its findings at various medical conferences throughout the year.

For epilepsy, Xenon's Phase 3 program includes two pivotal clinical trials, X-TOLE2 and X-TOLE3, focused on focal onset seizures (FOS). These trials, closely modeled after the successful Phase 2b X-TOLE study, will assess the efficacy, safety, and tolerability of azetukalner in approximately 360 patients per trial. Patient enrollment for X-TOLE2 is expected to be completed between late 2024 and early 2025.

In addition to FOS, Xenon is also targeting primary generalized tonic-clonic seizures (PGTCS) with its Phase 3 X-ACKT trial. This trial will evaluate azetukalner's efficacy and safety in 160 patients, potentially broadening the drug's application in epilepsy treatment. Furthermore, eligible patients from these trials may join an open-label extension study lasting up to three years, providing long-term data on azetukalner's effects.

The company's financial results reflect its ongoing commitment to research and development. As of March 31, 2024, Xenon reported cash and cash equivalents and marketable securities totaling $885.4 million. This robust financial position is expected to support the company's operations and clinical trials into 2027.

For the first quarter of 2024, research and development expenses rose to $44.3 million, driven by manufacturing activities for the azetukalner program and increased personnel-related costs. General and administrative expenses increased to $14.8 million, attributed to higher employee headcount, consulting fees, and IT costs. Despite these expenditures, Xenon reported other income of $11.5 million, primarily from higher interest income.

The net loss for the quarter stood at $47.9 million, compared to $41.7 million in the same period of 2023. This increase is mainly due to higher research and development expenses and personnel costs.

Xenon Pharmaceuticals continues to explore new pipeline opportunities, leveraging its ion channel expertise. The company's near-term focus includes developing Kv7 channel openers, Nav1.7 inhibitors, and Nav1.1 openers, with plans to advance several candidates into IND-enabling studies by 2024 and 2025.

In collaboration with Neurocrine Biosciences, Xenon is also developing treatments for epilepsy. The ongoing Phase 2 trial of NBI-921352, a selective Nav1.6 sodium channel inhibitor, is evaluating its efficacy in patients aged 2 to 21 with SCN8A developmental and epileptic encephalopathy.

Overall, Xenon Pharmaceuticals is making notable advancements in its clinical programs and maintaining a strong financial footing, positioning itself well for future growth and innovation in neurological and psychiatric treatments.