GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - XENON PHARMACEUTICALS INC

And it's my pleasure to introduce our next company, Sinon Pharmaceuticals. From the company, we have Taker Kelly, the CFO, and it's a pleasure to have you here, Taker. So maybe why, before going into the Q&A, you just released the third quarter financial results. So why don't you give us the latest updates on the company and then we'll move on from there. Sure. First of all, Gemma, thank you and Guggenheim for hosting us at the conference this year. It's great to be here in Boston with an awesome group of investors. And yeah, things at Xenon are going incredibly well right now. So for those of you who aren't familiar with XenON, we're an ion channel company. We've got capabilities from drug discovery and research, and we're on the cusp of becoming a commercial company for the first time in our history. We filed our NDA in September, and We look forward to commercializing in the U.S. the drug called Zetucalner for focal seizures. Beyond that, we've got expansion opportunities in neuropsychiatry. We've got ongoing studies in major depressive disorder, one of which we announced last night. On the Q3 earnings call, we'd been able to move up the readout for that study into December of this year, as well as a phase three study in bipolar depression. And beyond that, we just had recent data that we touched on in the Q4 call last night that we can dive into around our early stage pain programs. We have three in the clinic now. two are targeted against sodium channel called NAV 1.7, and another is a KV7 target, which is the same one we have for Zetucalner for focal seizures. And we just had phase one data for two of those at the World Congress on Pain for the IASP conference in Thailand. So a lot going on on the clinical side. We've got an early active research program as well, one focused around NAV 1.1 for Dravet syndrome, and a partner program that's in the clinic today with Neurocrin against NAV 1, 2, and 1, 6. And we're well capitalized. We have a billion two in cash and cash into 2029. So we're really at a kind of transformative time and look forward to some big milestones coming up over the next year and a half, two years. Thank you for that great overview. And clearly a lot to unpack there. So let's start with the epilepsy programs. So as you said, you submitted the NDA in September, and so we expect approval in the upcoming months. And And when we think about the label, how will that look like? Like, what's your base case scenario for the label? And when you think about, you know, the value proposition of the drug, of the two-calender, how will it be used in real-world clinical practice? Sure. And let me weave those two together because I think they're related and relevant. So, you Know, we think acetic calendar can be a really impactful drug in focal seizures. This is an area of high unmet medical need, even though there are a large number of agents that are approved today, most of which are generic. There's only one branded left. But there's still, first, a large group of patients that have breakthrough seizures and are not adequately well-controlled. And that's consistent with the trial population. So in the Phase 3 and registration study in the phase 2b, we saw very refractory patients. They'd been on five or six different ASMs, and they were, during the study, on two or three anti-seizure medications as well. but in focal onset seizures, the labels are very broad, so you don't get sort of line-of-therapy-type labels. It'll be a broad label for focal seizures, and we think that gives us the opportunity to start with patients who are more refractory, who are seen by epileptologists and really need quick seizure control to help them get their disease more under control, but to then move over time into earlier-line patients, and that goes to another update we had on the Q3 call last night where we're going to be opening a phase 3B4 study looking at what we call patients with a first add-on. So these are patients with epilepsy that when you are newly diagnosed, you usually go on one of two different types of agents as a monotherapy. So oftentimes you'll take generic Keppra as an SV2A modulator or a sodium channel blocker, and then you'll kind of flip-flop. So if you aren't well controlled on one, you'll maybe move to the other. At that point, if you're not really well-treated, most often you go to a kind of polypharmacy approach, and you get a first add-on. And that's where patients and physicians are really trying to get a hold of the seizure control in a different way. And we think that ultimately we can provide a really impactful benefit in those earlier-line patients and move from the more refractory later-line patients that will likely start with a launch up until those earlier line patients. You know, So in a heavily genericized market and an area where Keppra and other drugs have served patients so well, a lot of patients are effectively treated when they go on a monotherapy SV2A, and they don't ever need to get there. So we think, ultimately, first line is likely still to be reserved for generics that people do well on. But that first add-on could be a way for us to make this a really impactful large drug in the class. Yeah, that's actually a very interesting update that you had. I was wondering, so that's going to be an open-label study. Does it give you the opportunity to include the data also in the Section 14 of the label? Yeah, not clear that it would be kind of label-enabling or expanding the label. We think it will provide good scientific evidence of what activity looks like in earlier-line patients. We Think that's particularly important for general neurologists. So as we talked about on the call last night, we think it's also an opportunity to involve a broader range of physicians in the clinical development of ZetuCalendar that includes general neurologist as well. So not necessarily kind of expanding the label with an open label study, but we do think it can be impactful and helpful in terms of being able to look at what the drug can do for patients that aren't as refractory. And are you planning to show any interim data before the top line? Yeah, we'll provide more details on the study design. Last night, we just kind of debuted the high-level overview of what we want to do in the study. We'll talk a little bit more about the details going forward. We'll have a big presence at AES. That's the annual American Epilepsy Society meeting coming up in Denver in December. And we wanted to get this news out ahead of that so we can really start to talk with physicians and build some momentum around enrolling that study in the first half of next year. Got it. And since you mentioned AES, what shall we expect from the data there? You always have a very large presentation, number of presentations. We do, yeah. You know, we continue to increase our presence as a company as we mature. And again, on the cusp of being a commercial company, we'll have our largest presence ever at AES. And that's both on the conference room floor with our booth, with our medical affairs team, and doing things like talking to physicians about potential enrollment in studies like X-First. But also just continuing to build disease state awareness, to talk more about mechanism. That's one of the key things about a set to calendar that's different. We have a novel way of approaching anti-seizure medications. We'll be the first potassium channel modulator on the market here in the U.S. now if we're able to get approval. And so we'll have a big presence at AES. In addition, we've been, I think, very active on the clinical front in terms of putting out additional data. We had some additional data at the European Congress in August. At AES, you could expect one of the things we've done every year for the last few years is present updated data on the XTOL OLE. So XTAL was the Phase 2B study. It's the first of the two registration studies that we've filed on for approval. And what we've done is follow those patients that decided to go into the OLE or open label extension up to last year was 48 months. This year would be 60 months. And that's been really powerful data showing, one, that a lot of patients have stayed on study. So last year at AES, we talked about having just under half of those patients who enrolled in the OLA still on study after four years. So we think that's a real testament to the ability to get good, effective seizure control and good tolerability for patients. This year, we're going to roll that forward to 60 months. And so we'll have additional data there as well as some additional work from the top-line data on a Zetra calendar that we announced in March. And the other thing we had yesterday that wasn't in the press release but happened maybe midday was that we had the Phase 3 published in a peer-reviewed journal in JAMA Neurology for Rexel 2. Thank you. So it's been a busy time for our clinical medical fairs and scientific pubs team. Okay, that's great. And, of course, now the key focus for investors is the launch. So how to model that and, you know, what's the strategy? And can you give us an update where you stand in that regard? So how are you thinking about, you Know, physician targeting in the initial phase and then after you will get the data from experts' study to start with? So I think one of the things that Zinan has done incredibly well, So I joined about a year ago. We made really good early investments in our commercial and medical affairs function. So, you know, even leading into the XTOL2 data back in March, we already had, I think, a really strong core team in place to help us not only execute the studies, to position us to becoming a commercial company. So all that's accelerated since the Xtol2 data was incredibly positive. We had the largest placebo-adjusted MPC or median percent change in seizure frequency seen in an FOS study before and a really good benefit-risk profile across the two doses that we studied in that trial. And so from that, we've been really spending a lot of time, you know, continuing to build out the infrastructure internally. So our chief commercial officers built out the balance of his leadership team across areas like the commercial operations, marketing, market access. And so I think we've got a stronger core, and now we'll be continuing to build that team out. And they bring experience from large companies and small companies, a lot of experience in epilepsy launches and new drug launches, which we think is really important. And they've been doing a lot of the work now on the heels of the XTOL2 data combined with the XTO information that we submitted with FDA in September to really do all the additional work you need to do. So demand studies, pricing research, go-to-market strategy, targeting physicians. And what we talked about is that we think, again, this could be a really big drug. We think that it's going to be really impactful at the outset with epileptologists who, again. Have the more refractory late-line patients. But what's going to make it a really big drug and more widely adopted is its ability, given some of its features, to be used by the general neurologist. There's about 2,400 epileptologists in the U.S. There's About 18,000 general neurologists. And then there's around 16,000 APPs, advanced practice providers. So at the outset of launch, we think there's probably around 5,000 or 6,000 physicians that we're going to be targeting right out of the gate. And those are going to be the epileptologists, high prescribing, general neurologists, and APPs. And the goal there is really to get the drug in their hands, get them some experience with how well patients can do on it, and find what the right dose is for their patients. We expect to have four doses on label. So we'll continue to kind of build out the go-to-market strategy. And then, as I mentioned, over time, build out our presence amongst the general neuro call point more aggressively so that we can get broader adoption utilization. For physicians that I think struggle with some of the other agents today that require either long titration or have significant drug-drug interactions, that requires them to, for instance, de-escalate the dose on other concomitant ASMs. ZetuCalendar doesn't have any DDIs that require adjustments for anti-seizure medicines. It doesn't require titration. We have four doses, and that gives the physicians a lot of optionality about what the right starting dose is for their patients. We have a really nice curve in our investor deck that shows just how dose-dependent the efficacy is across the two studies in those four doses. And we see a different adverse event profile as you move up in dose as well. So we think that provides a lot of flexibility for physicians to try and figure out what the right dose is for their patient, depending on what the needs are. They could be somebody who has a significant seizure burden, and the whole goal is to get those seizures under control as quickly as possible. Or they could be a patient that, for instance, is lower body weight. So we know there's a BMI to exposure relationship with Zetacalner. So having the ability to maybe go in at 10 or 15 milligrams, which is still an effective therapeutic dose, but has a better AE profile than you do at 25, I think really speaks to the breadth that we think we can have with prescribers and patients. Makes sense. And I think in the past you have mentioned that you are preferring a type of specialty model approach, specialty pharma approach versus retail. So maybe can you explain to us what's the advantage of that and what's The Trade-Off and why did you prefer that approach? Yeah, so we're on the market, which will likely be kind of very beginning of 28 after we have the FDA review. And then there is often DEA scheduling that takes three months. So we'd be getting sort of DEA schedule, say, in the fourth quarter of 27, likely launching beginning of28. And it'll be almost nine years at that point since the last ASM has been launched in vocal seizures. That's a drug called Sinobamate or Xcopri. And again, at the time, they launched in the retail channel. I think both the way we look at it today, the experience of our team, and just how the industry has evolved, we really think a specialty pharma model can provide a lot better experience for physicians, for patients, and has advantages for us as a manufacturer and a sponsor. As I think we all know, when you go to a pharmacy in the U.S. these days, they're really incentivized to stock generics. It's very much a volume-based business. and for any specialty products, you know, it's hard to keep them on the shelf or have them available or to assist patients with things like copay assistance or prior authorizations. And so for us, being able to have the ability to help physicians and patients navigate that part of the process will hopefully facilitate the ability to get, you know, drug into patients' hands once the physician decides to write the script. We see in the data today that for agents that are often prescribed through the retail channel, they have a high rate of abandonment. So we think we can lower that and have scripts that get written, filled, and dispensed to patients more readily, which we think is good for patients and certainly good for us in terms of being able to convert the work that our teams did to promote awareness, visibility, and a physician's decision to prescribe into activity and uptake with patients. It also gives us a lot more information about the patient journey, more connectivity, so that whether it's about refills and just understanding where the drug's being used and how it's being adopted as we commercialize. So we think there are a lot of advantages to that, and we've seen the industry certainly evolve over the last 5 to 10 years from where initially SPs were very much relegated to rare diseases. I came from a company most recently that was in target oncology where, again, the patient numbers were in the thousands, not the hundreds of thousands that we were trying to help. And there, you know, it was very much standard to do it. I think it's become much more common in larger patient populations now to use an SP model. So we think it has got a lot of advantages across the channel and will help us, you know, get uptake increased as we launch. And talking about access, how are the payer conversations going and how long will it take to get like a broad coverage? And how important is that for the launch trajectory? Sure. You know, so we think the payer mix to start there is, you Know, commercials maybe around 40%. Because these patients often have seizures and can't drive, it is oftentimes more difficult for people living with epilepsy to remain employed and have jobs. So there are a higher number of patients that are on Medicaid. So that's about 40 percent in the balance in Medicare, roughly. And so we're going to go after all three parts of the channel. I think there are positives for us as we think about access. For government-paid programs, it has a protected class, epilepsy. So that's helpful in terms of being able to have engagement and adoption and coverage. And for the commercial pay side of things, right now, you know, the advantage is that it's a class with a lot of drugs, but all but one are generics. So from a category spend standpoint, it's not an area that's of high focus. It's not a drain on resources. And we bring what we think is a really compelling benefit risk and value proposition for payers, physicians and patients. We've got, again, really strong efficacy we've talked about, a tolerability and adverse event profile, an ease-of-use profile that we think is really compelling. And so we think we've got a very strong message, and our team has been working even before the XTOL2 data, but certainly since then, and will be up until approval, to really educate about the novel MOA, about all the reasons why we think this could be a really powerful new option for treatment for patients. So we'll work really hard over the coming time frame to think through what the best pricing strategy is. We don't have any guidance yet in terms of thinking through kind of what the coverage will look like at various points in time. But we've got a great team in place that's working really hard so that we get access as quickly as we can. And we'll have different things that you do when you launch a drug to provide quick starts and ways for patients as they navigate until we get coverage. Things like access to medications when physicians write the scripts. And, again, hopefully with the specialty pharma, being able to mitigate some of the roadblocks that come up with prior auths or other scientific exceptions, medical exceptions that you need in order to get coverage early after a drug is approved. So a lot of work on the market access side. We think that's going to be a strength of ours to be able to get courage for patients as quickly as we can. And what's the best benchmark to look at for the launch trajectory? Yeah, I think one of the things when you talk to physicians, you talk to payers and sponsors and manufacturers in epilepsy is that it has this mantra that's similar to what we talk about with prescribing patterns amongst physicians of low and slow, and that's often how people think about epilepsy launches. We don't have, again, a lot of data points. As I mentioned, Sonobimate was launched back in 2019, so there hasn't been anything in the last few years to really have as an analogy, but in general, when you look at prior launches, They tend to be a more conservative physician base, and they tend to be lower and slower in terms of uptake. Our goal is to take that shape of that curve and shift it up to the left. It's not going to become a rare disease launch. We're not going to have a spike and then a plateau. These drugs tend to grow right into LOE, so that's a good thing from our perspective that we expect to continue to grow all the way through our IP protection in the out years, and that it will really be about getting the drug and the mechanism kind of well-known by epileptologists, general neurologists. Having the drug experienced in their hands with patients, we know from the physicians that have worked with it in the clinical setting, they come away very favorably impressed. And certainly when we trial the product profile with physicians who haven't had patients on the drug, I think they're very eager to have it in their heads. They really want a novel mechanism. They love the ease of use features. And particularly for the general neurologist, that'll take a bit longer in terms of uptake for them. They don't see as many patients. They have a slightly less refractory patient population oftentimes. So I think it'll be a little bit different in terms of we're going to get better access and penetration earlier amongst high prescribing general neuros, more the epileptologists, for more late line patients. And then the goal is to quickly kind of move earlier in the treatment paradigm and broaden out the physician base to general neuros who maybe We don't see quite the concentration of patients with epilepsy, but we think we'll really value having an option that doesn't require the titrate, gets an effective dose early, and it doesn't acquire them to kind of down-dose other ASMs. Thank you for all those callers, Tucker. Now moving to the neuropsychiatry programs. So in September, you post intentionally your programs in MDD, bipolar, because you saw some events that were not present in the phase two. So during the phase three trial, did you have a chance to look further into the baseline features of those patients or any other possible potential factor that may have caused that? So that's my first question. And now what drove the acceleration in the readout that you expect in December? Sure. So as I mentioned at the outset, we're studying the drug not only in focal seizures and primogenital seizures, but also in major depressive disorder and bipolar depression. And we had two phase threes that were running and ongoing. What we announced in September was that in the phase three study, we'd started to see adverse events that we've seen all along in the epilepsy studies, but we importantly hadn't seen in a phase two B study that we run in depression before. So that was the ExNova study, and that's the basis on which we kind of planned our registration enabling phase three trials in MDD and BPD. So there wasn't any new safety event. It's the same events we'd seen throughout the development program, these neuropsychiatric AEs that we've seen with epilepsy, but we just hadn't seen them in the phase two B. So likely that was a smaller study, right? We had 50 to 60 patients per arm. There were two treatment arms and one placebo arm. And ultimately, I think it's probably kind of a regression to the mean. So we weren't surprised ultimately to see it, other than the fact that we hadn't seen it in the depression patients before. It's obviously a different indication, different benefit-risk profile. We have it unblinded, a large randomized study. We'll now be doing that in December, and we'll touch on that in just a second. But it really gave us the opportunity to step back and say, what's the right TPP for this drug in the different indication in MDD, where part of our value proposition, we think, is having a novel mechanism, like it is in epilepsy, that is different from the SSRIs or the SNRIs, but also has a different AE profile. So we haven't seen, for instance, things like weight gain or sexual dysfunction. Those are challenges oftentimes for patients and prescribers in Mdd. And so we obviously have an adverse event profile, but it's a different one. Andso that's part of the rationale for why we think it could be something that could work well for patients and physicians in MBD. But when we saw that, in fact, we were seeing on a blinded basis similar rates of these types of neuropsychiatric events, we decided to do two things. One was we were going to pause enrollment voluntarily of new patients in the Exonova 3, which is the second study, as well as the bipolar depression study. And our Exonoa 2 study was pretty far along. We had 360 patients, roughly, that were enrolled at that point. So we decided instead of waiting till we went back and figured out if we could have a dose escalation schema that might help ameliorate or soften the tolerability profile. We decided based on strong powering that we would cap enrollment at 360. Initially, we had said that we were going to read that out in the first quarter of 2027. The update we provided on the call last night was that we have been able to bring that back into December. So I think we learned a lot as we kind of made the decision to do that in September. Our clinic ops team and our CRO worked really hard to do all the things you need to do to kind of close out a study and get ready for top-line readout. And we were really pleased that they were able to pull that in to December. For us, having that risk-benefit profile and unblinding the study sooner is really helpful. One, we get to see in Exnova 2 how we did, and that will really help us inform better our development path going forward as we think about, you know, re-initiating dosing with a revised dose escalation schema, and talking with the agency about the path forward. So it's great to be able to get that in. It allows us to get the readout sooner and make good informed decisions based on that data. Got it. And I guess you have your own internal scenarios. So like what are you gonna do if you see something like three-point madras, three-points delta madras with a tolerability profile that is similar to the classical azitocaner profile. So let's say in a scenario like that, would you go on with some amendment in the protocol or would you rather stop the programs? What would be the decision in that scenario? Sure. So I think we feel confident that if we have a very positive result or a positive result, but maybe there's a little bit more nuance in it, that we would still move forward in that case and think through what the right dose escalation scheme is. So I Think even if it's a wildly positive result in efficacy, we feel like it's important to get the tolerability A profile optimized as much as we can. So I think we would still be looking at some dose modifications for reinitiating enrollment in X number 3. But ultimately, it's really going to depend on the totality of the data. So MED is a hard indication. We've always known that. We've been, I think, very sanguine about that. So that's why we're eager to get that readout. We really want to see what that benefit risk looks like. You know, we're using HAMD17 as the primary endpoint, and we looked at in the Phase 2 Madras. Here it's HamD17. And we've got important secondary endpoints around anhedonia, so the Schaap scale. So I think we really do see all that data. It'll be the first time, obviously, we're unveiling and unblinding a large study in MDD. And that totality of the information will give us a good sense of whether we've Got a strong effort here. And if for some reason we don't, we'll certainly, we've GOT a lot of good places to make those investments. Our hope is that all the reasons that we went into MDD in the first place remain true. We think this drug has an antidepressant effect and we think patients need new options. So we're hopeful that we have a positive result and we're able to get back on track quickly with the other studies. Makes sense. And maybe in this last minute or so, I would like to touch base on the other innovative part of the company, which is like pain. Actually, you have a long experience in pain, but you're bringing that back. And you recently had really interesting data from both the assets, That's the KV7 asset and the NAV1.7. Maybe can you give us the key highlights of those data, and how are you thinking strategically of bringing forward those programs? So we're very excited about these programs. I think in particular the NAv1.6 is an area where it has such a compelling genetic story, an area we and other companies for quite a long time have tried but not succeeded in getting good chemistry and a good approach that allows us to replicate the phenotype of having literally no pain for patients that don't have any expression or less expression in the NAV17. So for us, the healthy volunteer phase one data that we put out addressed a lot of the key issues that had been seen before. So again, it wasn't efficacy. We're moving into phase two POCs. But on NAV 17, we were able to get a drug that shows that we have no autonomic nervous system effects that had Been seen with prior ones. We have good free fraction. We have good target engagement. So we're getting at the receptor occupancy levels that we hoped for in both the central and peripheral nervous systems. And we're going to be trialing in this phase two in acute pain, a product profile that hasn't been tested before. So I think it's been a bit of a holy grail. It's been such an important target for people when they see the genetics. That has been a disappointment in the past. We think we've got hopefully the opportunity to look at a molecule that is really going tobe quite different. So we're excited to get that into the POC first half of next year. Not a different story with KV7, but again, there's real clinical evidence to support an anti-anealgesic effect in a non-OEPA pain product there. And we're looking forward to getting that as well into a phase two POC in the first half. But healthy volunteer data was really good on both kind of receptor occupancy, target engagement, and overall safety profile. And in addition, we had some supporting data pre-clinically In both cases, we had evoked pain models in monkey models, and we saw there really good pain reduction, so down 100 percent for the NAV1-7 and the KV-7, really significant pain reduction. So, again, early data in synos, but we think really supportive of the genetics and of the other preclinical data, like on 1120, which is the KB-7 that we've seen in mouse models, where you have, you know, challenges replicating some of the analgesic effect that opioids have in the kind of phase one in some of these models. And so we feel like the preclinical data we presented in Thailand was really supportive of what we think could be a really compelling profile in what could be very large indications. So we'll be going initially into acute pain. We think those are good markets. We believe the chronic market is obviously where the big opportunity is. And we think either as monotherapies or even potentially as combinations, either with each other, an Av1-7 and a KB-7, or with a 1-8 like Vertex had with Gernavax and others are working on clinically. So we think those are really exciting. We get from an investor standpoint, a lot of the focus is on the late stage, on commercial, that's understandable. And we're really excited and we'll continue to try and build value throughout the pipeline with our early stage assets as well. Really exciting opportunities there, and thank you so much, Tucker, for the great conversation. Thanks, Delma. Appreciate it. Take care.