STIFEL 2026 HEALTHCARE CONFERENCE - XENON PHARMACEUTICALS INC

Explicit Guidance:

• Launch Timing: Commercial launch for axitinib (Zetucalner) expected in early 2028, specifically targeting January.
• Revenue Curve: Anticipates a "modest revenue curve" at launch outset, with Year 1 sales estimated at low-to-mid single-digit percentages of peak sales (similar to historical trends for Vimpad and Keppra), rather than an immediate "hockey stick" adoption.
• Pricing Targets: Aims to price above recent benchmarks; specifically targeting levels superior to the $15,400 annualized gross price of Sonobamate and the $18,000 price of PriviAct.
• Cash Runway: $1.2 billion cash balance as of Q3 extends funding runway through 2029.
• R&D Investment: Significant capital outlay planned for 2027–2028 to build full commercial infrastructure prior to revenue generation, resulting in "hard burn years" during this period.

Business-Segment Outlook:

• Epilepsy (Zetucalner):
  • Launch Strategy: Focus on moving to the first add-on position (after patients fail 1–2 generic agents) rather than new-diagnosis monotherapy to mitigate competition.
  • Target Audience: Expanding beyond epileptologists to general neurologists; removing barriers via therapeutic dosing start (10, 15, 20, or 25 mg) without requiring titration or modulation of concurrent anti-seizure medications.
  • Clinical Profile: Emphasis on novel potassium channel mechanism with no direct competitor currently on market; excellent efficacy (placebo-adjusted) and ease of use compared to competitors requiring 11-week titration.
• Psychiatry (MDD):
  • Timeline: Unblinded data for Phase 3 study (Ex Nova 2, 360 subjects) expected in December.
  • Next Steps: If data shows separation, plan involves an FDA meeting to define the development path for Major Depressive Disorder (MDD); current focus remains on epilepsy launch unless MDD data is highly compelling.
  • Comorbidity Strategy: Potential to leverage antidepressant effects (even if MDD label isn't immediately pursued) to address the high percentage of epilepsy patients with comorbid depression, differentiating from neutral/negative mood anti-seizure medications.
• Pain Portfolio:
  • XCX1701 (Nav1.7): Entering Phase 2 proof-of-concept (acute pain) in 2026; Phase 2 studies (e.g., bunionectomy) expected to take ~1 year. Success here is viewed as a direct predictor for chronic indications (neuropathic pain, osteoarthritis).
  • XCNE1120 (KV7 modulator): Entering Phase 2 proof-of-concept (acute pain) in 2026; supported by preclinical data and historical fluoxetine data.
  • Second Generation: A second-generation Nav1.7 molecule is currently in Phase 1 healthy volunteer studies.

Market and Competitive Outlook:

• Pricing Power: Confidence in pricing leverage due to a lack of innovation in focal seizures for the last 5 years (since Sonobamate, 2019) and the absence of any other potassium channel modulators.
• Competitive Landscape: Anticipates minimal direct branded competition for the first add-on position as current market is dominated by generics clustering in SV2A and sodium channel blocker mechanisms.
• Adoption Dynamics: Acknowledges conservative physician prescribing habits ("low and slow") but expects to accelerate uptake by eliminating titration hurdles common with current branded options.

Macro / Industry Outlook:

• Regulatory Path: NDA for Zetucalner filed in September; agency review progressing with expectation of a standard review timeline leading to 2028 launch.
• Safety Perception: Management addresses market hesitation regarding rare psychiatric adverse events (e.g., psychosis), noting rates (<1%) are consistent with industry leaders (e.g., Levetiracetam) and transient, with no long-term sequelae.
• Clinical Practice Trends: Identifies a gap in current treatments regarding ease of initiation (titration requirements), positioning Zetucalner to solve a workflow friction point for general neurologists.

Strategic Initiatives:

• Commercial Build-out: Senior management team (including CCO) fully in place; team will be filled out across market access, operations, and sales in preparation for 2028 launch.
• Payer Engagement: Active testing of pricing profiles and access strategies to optimize patient uptake.
• Pipeline Expansion: Continuation of ongoing epilepsy studies, resumption and completion of X-Nova-3 (MDD), initiation of X-First (Phase 3b/4), and expansion of pain R&D.
• Research: Preclinical IND-enabling work for NAV1.1 small molecule candidate for Dravet's disease.

Risks and Headwinds to Outlook:

• Launch Velocity: Risk of slower-than-expected adoption by general neurologists due to conservative prescribing habits and lack of familiarity with branded anti-seizure medications.
• Financial Burn: Significant cash burn expected in 2027–2028 while building commercial infrastructure prior to revenue realization, necessitating disciplined capital management.
• MDD Data Uncertainty: Future psychiatry pathway depends entirely on December unblinding results; failure to show separation could halt MDD development or limit it to a communication tool for epilepsy.
• Safety Perception: Potential market hesitation regarding CNS-related adverse events (psychosis, cognitive issues), though management views this as manageable given historical context.

Management Tone on the Future:

• Confidence Level: High confidence in the Zetucalner clinical profile and commercial potential despite a modest initial launch curve.
• Strategic Hedges: Management maintains a "wait and see" approach on MDD pending December data, keeping the primary strategic focus on the epilepsy launch.
• Cash Position: Expressed satisfaction with the $1.2 billion cash position, characterizing it as "well-positioned" to fund the full commercial build-out and pipeline development through 2029.

Miscellaneous:

• Study Design: MDD Phase 3 (Ex Nova 2) utilizes a smaller sample size (~360 subjects) but maintains 90% power to detect a 2.5-point separation on HAM-D17, considered clinically meaningful.
• Dosage Strategy: Zetucalner will launch with four fixed doses (10, 15, 20, 25 mg) to simplify prescribing compared to competitors requiring complex titration.