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Edited Transcript of XENE earnings conference call or presentation 6-Mar-19 9:30pm GMT

Full Year 2018 Xenon Pharmaceuticals Inc Earnings Call

BURNABY Mar 13, 2019 (Thomson StreetEvents) -- Edited Transcript of Xenon Pharmaceuticals Inc earnings conference call or presentation Wednesday, March 6, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ian C. Mortimer

Xenon Pharmaceuticals Inc. - President, CFO, COO & Company Secretary

* Jodi Regts

Xenon Pharmaceuticals Inc. - VP of Corporate Affairs & IR

* Simon N. Pimstone

Xenon Pharmaceuticals Inc. - CEO & Director

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Conference Call Participants

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* Maurice Thomas Raycroft

Jefferies LLC, Research Division - Equity Analyst

* Stephen Douglas Willey

Stifel, Nicolaus & Company, Incorporated, Research Division - Director

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Xenon Pharmaceuticals Inc. Financial Results Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference, Jodi Regts. Ma'am, you may begin.

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Jodi Regts, Xenon Pharmaceuticals Inc. - VP of Corporate Affairs & IR [2]

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Thanks, Heather. Good afternoon. Thank you for joining us on our call and webcast to discuss our 2018 financial and operating results.

Joining me on today's call are Dr. Simon Pimstone, Xenon's Chief Executive Officer; and Ian Mortimer, Xenon's President and Chief Financial Officer. Following this introduction, Simon will provide perspective on Xenon's progress, and then Ian will review our financial results. After that, we will open up the call to your questions.

Please be advised that during this call, we will make a number of statements that are forward-looking, including statements about the sufficiency of our cash to fund operations into 2021; the timing of IND or IND equivalent submissions with regulatory agencies; the initiation of future clinical trials; the efficacy of our clinical trial designs and anticipated enrollment; the potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of our product candidates; the timing of and results from ongoing clinical trials and preclinical development activities; our ability to achieve certain milestones in our proprietary development programs; the results of our research and development efforts; the status and timing of the potential addition of new programs to our pipeline and related development activities; the timing of our public presentation and potential publication of future clinical data; and the potential to advance XEN496 into a Phase III clinical trial and XEN007 into a Phase II or later stage clinical trial.

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 our 2018 results and the accompanying annual report on Form 10-K will be available under the Investors section of our website at www.xenon-pharma.com and filed with the SEC and SEDAR.

Now I'd like to turn the call over to Simon.

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [3]

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Thank you, Jodi, and good afternoon, everyone. 2018 was a pivotal year for Xenon, as we built out our neurology pipeline and advanced multiple product candidates using a variety of development strategies, including a precision medicine approach to address rare pediatric disorders. This foundational work has resulted in 4 distinct therapeutic candidates, XEN496, XEN1101, XEN901 and XEN007. These are expected to be in Phase II or later stage development this year as well as the potential for additional development candidates, which we are very excited about and which we expect to report on in the second half of this year.

On our call today, I'll provide an update on all of Xenon's clinical stage products before turning things over to Ian, who will then provide a financial and milestone overview.

Let me start with XEN496, a Kv7 potassium channel modulator with the active ingredient ezogabine. We're developing XEN496 as a treatment for KCNQ2 epileptic encephalopathy or KCNQ2 epilepsy, which is a rare, severe neuro-developmental pediatric disorder with a significant seizure burden and profound developmental impairment.

Ezogabine was previously approved by the FDA as an antiepileptic drug, or AED, as an adjunctive treatment for adults with focal seizures with or without secondary generalization. In fact, ezogabine is the only AED previously approved by the FDA with a mechanism of action that potentiates Kv7-mediated potassium current.

GlaxoSmithKline marketed ezogabine in various jurisdictions as Potiga in the U.S. and as Trobalt in Europe, but withdrew the drug from the market worldwide in June 2017, citing commercial reasons.

In the landscape of other approved AEDs in the adult population, ezogabine never gained a large market share due to a number of liabilities, including pigmentation risk, especially the initial concerns about potential visual toxicity related to retinal pigmentation, which, to date, have not been proven, as well as issues around the 3x a day dosing regimen and Cmax-related CNS adverse effects as well as urinary retention observed in approximately 1% of patients.

While ezogabine was approved for adult focal epilepsy, published case series reported on the successful use of ezogabine in children with KCNQ2 epilepsy suggesting that XEN496 could be efficacious in this often hard-to-treat pediatric patient population with good reported tolerability. While noncontrolled, these clinical series reported improvements in seizure burden as well as in development and behavior.

We received orphan drug designation, or ODD, from the FDA for XEN496 as a treatment of KCNQ2 epilepsy. Importantly, we obtained the regulatory right of reference from GSK, authorizing the FDA to reference GSK's nonclinical and clinical data when considering our regulatory submissions. This is especially valuable considering that ezogabine has been used by thousands of patients. We established a strong -- a steering committee made up of key opinion leaders in pediatric epilepsy fields to help guide the clinical development of XEN496.

In response to our pre-IND briefing package submitted in 2018, the FDA indicated that it was acceptable to study XEN496 in infants and children up to 4 years old, and that a single pivotal trial in approximately 20 patients may be considered adequate, provided we show evidence of a clinically meaningful effect.

Recognizing that ezogabine was initially developed as a hard coated tablet that is unsuitable for use in children, we are finalizing a pediatric-specific formulation and we expect to complete preclinical formulation testing with the final drug product in the second quarter of 2019. We're on track to file an investigational new drug, or IND application, in the third quarter of 2019. And based on this regulatory feedback, we anticipate initiating a Phase III clinical trial thereafter.

This timeline is based on our assumption that the testing of our new XEN496 pediatric formulation in healthy adult volunteers will not be a regulatory requirement prior to initiating a Phase III clinical trial. We're excited that XEN496 provides us with the opportunity to move rapidly into late stage development and to apply a precision medicine approach to treating KCNQ2 epilepsy. We look forward to providing additional details regarding the clinical development of XEN496, including the final anticipated trial design and endpoints.

Next in our development pipeline is XEN1101, a differentiated next-generation Kv7 potassium channel modulator being developed for the treatment of focal adult epilepsy and potentially other neurological disorders. We announced final data from the XEN1101 Phase I clinical trial, including the transcranial magnetic stimulation, or TMS studies, at the American Epilepsy Society Annual Meeting this past December.

Just to briefly review, the objectives of the XEN1101 Phase I clinical trial were to evaluate the safety, tolerability and PK of both single ascending doses and multiple ascending doses using a powder-in-capsule formulation of XEN1101 in healthy subjects. The XEN1101 Phase I clinical trial also included a pharmacodynamic readout from TMS studies that were designed to assess XEN1101's ability and potency to modulate cortical excitability, thereby demonstrating activity in the target CNS tissue.

To summarize the results presented at AES, the Phase I 1101 data included PK profile that supports once-a-day dosing and exhibited an AE profile consistent with antiepileptic drugs of this class. The majority of AEs were mild or moderate, resolved spontaneously and were consistent with antiepileptic drugs of this class. Sedation including somnolence and drowsiness and dizziness, including lightheadedness and presyncope were the most common AEs; while mild cognitive effects, including memory and speech impairment and blurred vision were also observed in a dose-dependent manner.

There were no serious AEs, no deaths and no clinically significant ECG or laboratory findings, and no urinary findings and no pigmentation was observed. Thus, these Phase I data suggests that XEN1101 is generally safe and well tolerated in the doses examined, including single doses of up to 30 milligrams and multiple doses of up to 25 milligrams once daily.

In the Phase Ib TMS study, XEN1101 reduced corticospinal excitability, as demonstrated by concentration-dependent elevation in resting motor threshold, the key TMS-EMG measure. In addition, XEN1101 modulated TMS-evoked EEG potentials, otherwise known as TEPs, in a pattern consistent with reductions in cortical excitability.

Overall, the Phase Ib TMS study provides evidence of the CNS effects of a single 20-milligram dose of XEN1101, as indicated by suppression of cortical and corticospinal excitability and helped us with dose selection for our XEN1101 Phase IIb clinical trial where this 20-milligram dose was set as the mid dose of 3 active dose groups.

We have recently initiated our Phase IIb clinical trial in adult patients with focal epilepsy. The Phase IIb clinical trial is designed as a randomized, double-blind, placebo-controlled multicenter study to evaluate the clinical efficacy, safety and tolerability of XEN1101 administered as adjunctive treatments in adult patients with focal epilepsy.

Approximately 300 patients will be randomized in a blinded manner to 1 of 3 active treatment groups or placebo in a 2:1 to 1:2 fashion using doses of XEN1101 of 25 milligrams, 20 milligrams and 10 milligrams, plus a placebo arm. The primary endpoint in this trial is the median percent change in monthly focal seizure frequency from baseline compared to treatment period of active versus placebo.

An IND application for XEN1101 has been accepted by numerous regulatory authorities, including the FDA, and site selection and patient enrollment are now underway for the trial in the United States, Canada and Europe. Depending upon the rates of enrollment, which we will have a better idea of around mid-year, top line results from XEN1101 Phase IIb are anticipated in the second half of 2020.

Turning to the third product in our development pipeline, XEN901, a potent, highly selective Nav1.6 sodium channel inhibitor being developed for the treatment of epilepsy. There is strong human genetic validation supporting the rationale for treating epilepsy by blocking the Nav1.6 sodium channel. Nav1.6 is a highly expressed sodium channel in excitatory pathways in the CNS. When mutations in the SCN8A gene, which encodes the Nav1.6 sodium channel result in a gain of function in the Nav1.6 sodium channel, children can present with a very severe form of epileptic encephalopathy in infants known as SCN8A epilepsy or EIEE13.

Also at the December AES meeting, we disclosed interim results from a randomized, double-blind, placebo-controlled Phase I clinical trial to evaluate XEN901 safety, tolerability and PK in both single and multiple ascending dose cohorts of healthy adult subjects and included a pilot TMS arm as well. The XEN901 Phase I clinical trial is now complete.

To summarize the results presented at AES briefly, XEN901 PK data demonstrated dose proportionality with a predicted half-life of 8 to 11 hours, which suggests that XEN901 could be compatible with a once or twice daily dosing regimen. The majority of AEs in the Phase I trial were deemed unrelated to XEN901, were mild or moderate, transient and resolved spontaneously. All AEs considered possibly related to XEN901 were mild. Only muscle twitching, nausea and dizziness were reported in more than one subject. The safety results suggest XEN901 is overall generally safe and well tolerated in the doses examined.

The pilot TMS study for XEN901 was previously presented during AES. But to summarize, XEN901 showed increases in resting motor threshold and active motor thresholds of approximately 2%, decreases in amplitude of TMS-evoked potential at 180 milliseconds, or the P180, and an increase in delta power in the resting state EEG. The observed changes in TMS-EMG and TMS-EEG parameters suggest activity of XEN901 in the target CNS tissue.

Given the PK and safety profile in Phase I and the fact that we are reaching exposure in humans, where we demonstrated efficacy in preclinical models, we are now planning for Phase II development, either to evaluate XEN901 as a treatment for adult focal seizures or for rare pediatric forms of epilepsy, including SCN8A epilepsy patients, depending on feedback from planned discussions with regulatory agencies.

We expect to receive regulatory feedback on advancing XEN901 directly into pediatric SCN8A epilepsy patients in the second quarter of 2019, and pediatric formulation development and juvenile toxicology studies are underway to support pediatric dosing.

I also wish to update you today on our fourth development stage product, XEN007, a CNS-acting calcium channel modulator, which contains the active ingredient flunarizine. Flunarizine is available in certain countries outside of the United States and has been approved for the prevention of chronic migraine and for vertigo.

Given its activity on enhancing cerebral blood flow and reducing cortical spreading depression, flunarizine has been used in many indications and has been reported to have clinical benefits in treating multiple neurological disorders, including hemiplegic migraine, or HM; alternating hemiplegia of childhood, or AHC; pediatric cyclical or periodic migraine; and as adjunctive treatment in certain epilepsies.

You may recall that we previously received orphan drug designation from the FDA for XEN007 for the treatment of both AHC and HM. The FDA has recently granted Xenon a rare pediatric disease designation for the treatment of AHC with XEN007. Receipt of this RPD designation from the FDA is an important milestone for our XEN007 program and it underscores the need to find treatments for AHC, a rare, severe and debilitating neurological movement disorder that presents within the first 18 months of life and causes lifetime morbidity and increased mortality.

Importantly, the RPD designation allows recipient companies upon approval of the subject indication to be eligible for a priority review voucher, which may be used to obtain what is referred to as a priority review for a future submission of a new drug application or NDA.

Despite literature reports of efficacy with flunarizine in over 300 cases of AHC, there are no FDA-approved drugs for AHC, and we have the support of key physicians and patient efficacy groups to pursue the development of XEN007 as a treatment of AHC. We will continue to obtain and evaluate regulatory feedback and anticipate supporting at least one Phase II or later stage clinical trial in an orphan neurological indication this year.

Given the widespread use of flunarizine in parallel with our regulatory interactions with the FDA, we are also considering other development strategies for XEN007. As we continue to explore our interest in pediatric epilepsy disorders, we have had a number of discussions with physicians, who have expressed interest in supporting investigator-sponsored studies. And we are making very good progress working with an investigator on a specific protocol in order to initiate a physician-sponsored clinical trial.

To further enable advanced clinical development of XEN007 across the variety of development pathways that I've outlined, we have entered into key exclusive licensing agreements in order to access regulatory files and drug product manufacturing.

I also wanted to flag for you an important industry collaboration that was announced just last week. We, along with Invitae and other corporate partners, are sponsoring Behind the Seizure, a unique collaboration that aims to provide faster genetic testing for infants and young children with epilepsy.

Previously available to 2 to 4-year-old children, the Behind the Seizure program has now expanded eligibility to make no-cost genetic testing available for health care providers to order testing for infants and children who have had an unprovoked seizure from birth up to age 5. The aim is to encourage the rapid identification of the genetic causes of seizures in infants and children, including those with KCNQ2 and SCN8A epileptic encephalopathies. By offering this no-cost genetic testing for very young patients, it is hoped that earlier diagnoses will lead to improved treatment outcomes through the introduction of personalized precision medicine approaches.

Behind the Seizure's epilepsy panel comprehensively surveys more than 180 epilepsy genes, including KCNQ2 and SCN8A. And to date, hundreds of institutions in the United States have participated in the program. As a collaborating company, we received data reports containing all identified gene mutations and other variants and the physician's contact that ordered the tests.

In addition to the Behind the Seizure's program data, we'll have access to retrospective mutation data for selected genes going back to 2017. This physician and genetic-based information assists with identifying those physicians who have patients, for example, with ultra-orphan KCNQ2 and SCN8A epileptic encephalopathy. This data helps to build a registry of high-priority physicians for the potential commercialization of our precision medicines and for selecting specific clinical sites and cases for our clinical trials of XEN496 and XEN901.

Before turning this over to Ian, who will summarize our 2018 financial results and provide some concluding remarks, I want to reiterate how proud I am of the immense amount of progress the Xenon team has made over this past year. I believe that Xenon currently is one of the most innovative and exciting CNS pipelines in development in the biotech industry with numerous important catalysts over the next 12 months.

We intend to pursue a variety of development strategies, such as those focused on using a precision medicine approach to address rare pediatric disorders with a genetic basis, such as KCNQ2 or SCN8A epilepsies or alternating hemiplegia of childhood, as well as those targeting broader patient populations, including with 1101 adult patients with focal epilepsy or children with more common forms of childhood epilepsy.

With the support of a healthy balance sheet, we have 4 very promising drug candidates all poised to be in Phase II or later stage development over the next 6 to 12 months. We are also working on numerous, potentially new development candidates, and we expect to have updates in this regard in the next 6 months as well. With this positive backdrop, we intend to enthusiastically advance our drug development programs and I look forward to keeping you up-to-date on our progress.

Now over to Ian.

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Ian C. Mortimer, Xenon Pharmaceuticals Inc. - President, CFO, COO & Company Secretary [4]

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Thanks, Simon, and good afternoon, everyone. I'll start by providing an overview of our cash position and cash runway guidance, and then I'll provide a few highlights of the financial statements.

Cash and cash equivalents and marketable securities as of December 31, 2018, were $119.3 million. This compares to $43.7 million as of December 31, 2017. As I noted on our last call, our balance sheet was strengthened this past year through the successful completion of an underwritten public offering in September, as well as other raises earlier in the year. The raise in September provided us with proceeds of $59.2 million, net of underwriting discounts and commissions, but before operating expenses.

Another positive benefit of this offering included the addition of high-quality institutional shareholders who continue to support our strategic goals. As of December 31, 2018, there is approximately 25.75 million common shares outstanding and approximately 1 million Series 1 preferred shares outstanding, which are convertible into common shares on a one-for-one basis at the option of the holder, subject to certain limitations.

Based on our current assumptions, which include fully supporting the planned clinical development of XEN496, XEN1101, XEN901 and XEN007, we anticipate having sufficient cash to fund operations into 2021, and this excludes any revenue generated from either existing partnerships or potential new partnering arrangements.

I won't provide any specific comments on our financial statements as all of the details are covered in our press release and in the 10-K filing. However, I did want to bring to your attention a onetime expense that occurred in September, where we incurred a onetime $6 million payment to Valeant or Bausch Health, and this was for the buyout of all future milestone payments and royalties owed with respect to our XEN1101 product candidate. This was a very important transaction for Xenon as we now own nominal future economics on all 4 assets within our proprietary clinical pipeline, which gives us tremendous flexibility as we develop these products.

So in summary, looking to the remainder of the year, we anticipate initiating a Phase III clinical trial for XEN496 for the treatment of KCNQ2 epilepsy, advancing our ongoing XEN1101 Phase IIb clinical trial in adult focal epilepsy with the goal of approximately half the trial recruited by year-end, initiating a Phase II clinical trial for XEN901 in either pediatric or adult epilepsy indication, depending on regulatory feedback which we expect during the second quarter.

And also, we expect to initiate an investigator-sponsored Phase II clinical trial for XEN007 in the near term, as well as working towards a Phase II or later clinical trial in an orphan neurological indication, possibly alternating hemiplegia of childhood, and this will obviously depend on regulatory input. We intend to achieve these development milestones with the support of a strong balance sheet that funds our portfolio into 2021.

To build on Simon's comments, in conclusion, we have built out an innovative CNS product portfolio that has both breadth and depth and with more to come. While I am proud of the great amount of progress that we have made over the past year, I'm even more excited looking to the future with the prospects of having multiple neurology products in mid and late-stage clinical development this year. We look forward to keeping you updated on our progress throughout the year.

Operator, we can now open the call up for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from Stephen Willey with Stifel.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [2]

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Just wanted to clarify regarding 496. So is it your intention then to secure definitive regulatory guidance on the proposed pediatric formulation and, I guess, the lack of bridging study prior to submitting an IND filing? And if so, I guess, kind of how does that logistically work? Will there be some formal FDA meeting that needs to go on the calendar? Or is this just something that you can solicit from the agency, I guess, anecdotally?

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [3]

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Steve, it's Simon. Thank you. At the moment, we aren't looking to seek formal guidance before the IND submission anticipated for Q3. We do, as I've stated earlier in the call, anticipate getting in vitro and in vivo PK data on the new product formulation probably quite early in Q2. Obviously, we'll look at that and make a determination. At current, our thinking is the likelihood is lower rather than higher of needing a bio study, but -- a bioequivalence study, and the current feeling is that we should be submitting without the need for bioequivalence IND in the third quarter. If we see anything in the data over the next few months in terms of both in vitro and in vivo, that may change that plan. Obviously, we will amend. But currently, the plan is not to go to the FDA prior to the submission, which as I said is Q3.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [4]

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And then, I think there's also kind of a bit of a discussion that's occurring with respect to endpoint selection for the Phase III trial. And just kind of wondering if you can provide an update there as well.

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [5]

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Yes, we're finishing up -- I think we've made very good progress in the last month or 2 with our KOLs. I'd say we're pretty close. A lot of the protocol development, I'd say, focuses on 2 main issues, Steve. One is what exactly is the endpoint going to be. We've already had guidance and we've communicated this that the FDA would like to see video EEG in that endpoint. What we don't know at this point is exactly what the duration of video EEG episodes will be: 48 hours, 72 hours, 96 hours, one continuous video EEG or multiple. So that's under development with KOLs. The second is, as we've guided again before the feedback from the FDA was that a single pivotal trial of approximately 20 subjects should be sufficient, assuming or provided we show evidence of clinically meaningful effect.

Now we need to define what the clinically meaningful effect is. And if P value-driven, what does that look like. We're doing some of that power calculation work. And of course, what ties into that is what does the protocol look like specifically, is this placebo-controlled or is it active baseline versus end of study controlled just with an active arm. That's looking like where we're probably leaning. Again, this is all pre-FDA interaction. I would say, in the second quarter, Steve, we will have a final protocol developed, statistical plan modeled, and we will be looking to submit that to the FDA again in the third quarter. We don't think at this point we need prior interaction with the FDA. We think we'll submit the IND in Q3 with a protocol that's been inputted by, really, the key opinion leaders in this space.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [6]

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Very helpful. And then, just on 901. I know the Phase I dose escalation data really seems to suggest that you've got an assay with a really wide therapeutic window here.

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [7]

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Yes.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [8]

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And I know that you're guiding to Phase II development occurring in either peds or adults as kind of being the next step. But how are you guys thinking about just pushing dose further? Presumably, you'd like to reach a DLT at some point, and just whether or not that's more easily accomplished just with the existing formulation in an adult patient population.

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [9]

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Yes, I think that's an excellent point, Steve. And we don't know which way the FDA is going to go on this. We think there is a very strong rationale for getting this drug into refractory 8A gain-of-function children. Some kids do respond. Interestingly, the best drugs typically for the 8A gain of function where they do respond to typically sodium channel blockers. So this does again provide further support for a more selective on-target drug that we can dose with higher receptor occupancy and better tolerability. The morbidity and mortality of these children is high, about 10% SUDEP by the age of 10 to 12 in these kids. So there's absolutely no question that a proportion of these children are still markedly refractory, and we would like to motivate, given safety, both preclinically and clinically to date, that we could design and have really designed a very safe titration-based protocol that we think could test the activity of this drug in these children in a very safe manner.

The -- to your point, I think, if we're really going to sufficiently dose-escalate above the Phase I doses, that would probably be more likely in an adult patient population. Again, we're doing some preclinical work to further expand our therapeutic index, but we'd obviously have to take into consideration whether it's an adult or pediatric study. And I think, in an adult study, we may well be able to go to more DLTs. We did not reach MTD in the Phase I. And so we actually don't know whether we're at the -- how far off we are from the maximum tolerated dose. What I will say is, at the concentrations we did achieve with good tolerability in the Phase I, we get well above the predicted efficacy range based on the animal data. So I think that's probably -- at least that's a good benchmark. We're getting above the predicted efficacy exposure. We don't know what the MTD is, and that's probably something we would test if we go into adults.

So I think, Steve, long-winded answer, but we are hoping to get into peds as quickly as we can if supported by juvenile tox, which is obviously just initiating. We'll have that done in time, obviously, for when we'd like to submit. But we are going to the FDA shortly, at least submitting questions around whether the next phase of development could be a pediatric study for 901. And if the answer is yes, these are the things we need to do, but we could get there. That would be the focus probably for this year. If the answer is no, they'd like to see more adult work, then I think in the second half of the year, we can expect the Phase II trial proof-of-concept in focal -- adults with focal epilepsy. And there, I think, we would certainly look to push dose.

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Operator [10]

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(Operator Instructions) You next question comes from Maury Raycroft with Jefferies.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [11]

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To start, for 1101 for the Phase IIb, I'm wondering how many sites and what potential number of patients you anticipate being enrolled by midyear? And you commented that you should have a better idea on how the trial is going by midyear. Will you provide an update at that point?

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Ian C. Mortimer, Xenon Pharmaceuticals Inc. - President, CFO, COO & Company Secretary [12]

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Maury, it's Ian. So obviously, the total trial number is 300 subjects. And what we said in our prepared remarks today is that we think we should be about halfway in terms of patients enrolled by the end of this year. We haven't provided any guidance on where we will be at midyear. I think, kind of in Simon's comments, and I'd echo them, is you need to be a number of months into a study just to see what that enrollment currently looks like. So I think by midyear, we'll be able to confirm that we're on track for our top line data in the second half of 2020.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [13]

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Got it. Okay. And then, for 007, you've mentioned you have a licensing agreement to access regulatory files and drug manufacturing info. Just clarifying on that, does that encompass right of reference to historical efficacy and safety data?

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Ian C. Mortimer, Xenon Pharmaceuticals Inc. - President, CFO, COO & Company Secretary [14]

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So there's no -- so this isn't in the U.S., right? So it's not a right of. So it's very different than 496, where the right of reference we received from GSK is such that the FDA can refer to the GSK regulatory filings with FDA. Flunarizine was never developed in the U.S. So we have 2 relationships. We have a relationship on primarily it's kind of the -- it's broader than just preclinical, but it's primarily on tox, where you kind of think about the preclinical package, nonclinical package as well as clinical data. So it's not a right of reference, but we can use that information in our submission to FDA. And then, the second relationship we have is with a manufacturer of the commercial product outside of the U.S. So essentially, that would be our CMC section. So a huge amount of the heavy lifting that we would need to provide to FDA, we've gained through relationships with 2 other third parties.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [15]

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Got it. That's helpful. And then, on the Behind the Seizure program, just wondering if you're planning on providing updates on that program along the way and if that program is going to be expanded outside the U.S. as well?

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [16]

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Yes, I'll start with the second one. We don't know that. I think that's a question for Invitae. And we're focusing the relationship for now on the U.S. testing. So I don't have an answer. In terms of the first question, we haven't planned to provide updates. It's something we will certainly consider. We're using this primarily for us to help to build a registry both for commercial reasons but also incident cases for the clinical trial. So we hadn't certainly planned updates. And -- but we will certainly consider this and maybe do some annual updating of this as we look forward.

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Operator [17]

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(Operator Instructions) And I am showing no further questions at this time. I'd like to turn the call back over to Jodi Regts for closing -- I am sorry, we do have another question that's popped up from Maury Raycroft with Jefferies.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [18]

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I just have one more question. Just wondering for the new development candidates that you mentioned, are those from in-house development? Or are they from outside partners? And would you potentially even revisit some of the candidates from the Genentech collaboration?

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Simon N. Pimstone, Xenon Pharmaceuticals Inc. - CEO & Director [19]

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Yes. So the answer to the second part of your question is not at this point. Genentech is fully focused on the 1.7 pain program. It's internalized at Genentech, as we've updated. And we'll provide guidance as Genentech gives us authority to do under our confidentiality disclosure requirements or provisions. So that -- the answer to that is no, not at this time. In terms of the first part of your question, where might new development candidates come from? Maury, I think you can expect much of the same, which means we've got some very exciting internal programs, some of which are actually quite advanced, others which are earlier stage. But we also have some very interesting concepts that can be maybe considered more along the lines of what you've seen with 496 and 007 for new development opportunities that we think could be fast-tracked and that fit beautifully within our strategic areas of focus, neurology, orphan opportunities, ion channel modulation and some other mechanisms within that bag as well.

But there's actually a considerable amount of activity underway, both on the discovery in-house, but also, we've got some really, I think, very creative ideas not too dissimilar to what you've seen with previous announcements. And I think, again, depending on how work goes over the next few months, we certainly hope and aim to have some announcements around new development opportunities in the second half of this year, which could add very considerably to the pipeline if those turn out, in studies we have underway, to be in our favor.

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Operator [20]

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And I am showing no further questions at this time, I'd like to turn the call back over to Jodi Regts for closing remarks.

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Jodi Regts, Xenon Pharmaceuticals Inc. - VP of Corporate Affairs & IR [21]

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Thanks for joining us today. Operator, we will now end the call.

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Operator [22]

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Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you all may disconnect. Everyone, have a wonderful day.