Xenon Pharmaceuticals Inc

Previous wording

We are a neuroscience-focused biopharmaceutical company committed to improving the lives of people living with neurological and psychiatric disorders. We are advancing a novel product pipeline to address areas of high unmet medical need, including epilepsy and depression.

Current wording

We are a neuroscience-focused biopharmaceutical company dedicated to discovering, developing, and delivering life-changing therapeutics. We are advancing an ion channel product portfolio to address areas of high unmet medical need, including epilepsy and depression.

Previous wording

Azetukalner (XEN1101) is a novel, potent Kv7 potassium channel opener being developed for the treatment of epilepsy, including focal onset seizures, or FOS and primary generalized tonic-clonic seizures, or PGTCS, as well as major depressive disorder, or MDD, with the Company exploring applicability in other neuropsychiatric disorders.

Current wording

Azetukalner, a novel, highly potent, selective Kv7 potassium channel opener, represents the most advanced, clinically validated potassium channel modulator in late-stage clinical development for multiple indications. We are currently developing azetukalner for the treatment of epilepsy, including focal onset seizures, or FOS, and primary generalized tonic-clonic seizures, or PGTCS, as well as major depressive disorder, or MDD, while exploring applicability in other neuropsychiatric disorders.

Previous wording

Phase 3 X-ACKT clinical trial is currently enrolling patients and is intended to support potential regulatory submissions in an additional epilepsy indication of PGTCS. This multicenter, randomized, double-blind, placebo-controlled trial is evaluating the clinical efficacy, safety and tolerability of azetukalner in patients with PGTCS.

Current wording

Phase 3 X-ACKT clinical study is currently enrolling patients and is intended to support potential regulatory submissions in an additional epilepsy indication of PGTCS. This multicenter, randomized, double-blind, placebo-controlled trial is evaluating the clinical efficacy, safety and tolerability of azetukalner in patients with PGTCS.

Previous wording

We continue to support the investigator-sponsored Phase 2 proof-of-concept study of azetukalner in MDD led by Icahn School of Medicine at Mount Sinai, with patient enrollment anticipated to complete this quarter.

Current wording

We continue to support the investigator-sponsored Phase 2 proof-of-concept study of azetukalner in MDD led by Icahn School of Medicine at Mount Sinai. Patient enrollment for this study is now complete and results are anticipated in the first half of 2025.

Previous wording

As leaders in the small molecule ion channel space, we continue to leverage our extensive expertise to discover and develop potassium and sodium channel therapeutics. We are evaluating multiple therapeutic candidates targeting Kv7, Nav1.7, and Nav1.1 across various indications with the goal of filing multiple INDs, or equivalent, in 2025.

Current wording

As leaders in the small molecule ion channel space, we continue to expand our portfolio by leveraging its extensive expertise to discover and develop potassium and sodium channel therapeutics, including candidates targeting Kv7, Nav1.7, and Nav1.1 across various indications with the goal of filing multiple INDs, or equivalent, in 2025.

Previous wording

We have nominated multiple Kv7 development candidates, with a lead candidate in IND-enabling studies. Kv7 may have utility in a broad range of therapeutic indications including seizures, pain, and neuropsychiatric disorders, such as MDD.

Current wording

IND-enabling work is underway with multiple Kv7 development candidates. Kv7 may have utility in a broad range of therapeutic indications including seizures, pain, and neuropsychiatric disorders, such as MDD.

Previous wording

A lead Nav1.7 candidate is expected to enter IND-enabling studies in the near term. Nav1.7 is an important pain-related target, based on strong human genetic validation, that may represent a new class of medicines without the limitations of opioids.

Current wording

IND-enabling work is underway with a lead Nav1.7 development candidate. Nav1.7 is an important pain-related target, based on strong human genetic validation, that may represent a new class of medicines without the limitations of opioids.

Previous wording

We expect to nominate a lead Nav 1.1 candidate, as pre-clinical data suggests that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome.

Current wording

We expect to nominate a lead candidate within our Nav1.1 program in 2025. Pre-clinical data suggests that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome.

Previous wording

As part of our ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy, a Phase 2 clinical trial is evaluating NBI-921352 (formerly XEN901) in an orphan pediatric epilepsy (SCN8A-DEE), and the next lead candidate, a Nav1.2/1.6 inhibitor, is in IND-enabling studies with the intent to progress into human clinical trials in 2025 as a potential treatment for focal onset seizures.

Current wording

As part of our ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy, a Phase 2 clinical trial is evaluating NBI-921352 (formerly XEN901) in an orphan pediatric epilepsy (SCN8A-DEE), and the next lead candidate, a Nav1.2/1.6 inhibitor, is in IND-enabling studies with the intent to progress into human clinical trials in 2025 as a potential treatment for FOS.

Previous wording

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception and expect to continue to incur net losses for the foreseeable future. We had a net loss of $105.9 million and $89.2 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $771.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We anticipate that our operating expenses will increase substantially, particularly as we:

Current wording

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception and expect to continue to incur net losses for the foreseeable future. We had a net loss of $168.6 million and $137.7 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $833.8 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We anticipate that our operating expenses will increase substantially, particularly as we:

Previous wording

seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials;

Current wording

advance additional product candidates into pre-clinical and clinical development; seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials;

Previous wording

The following table summarizes our operating expenses for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our operating expenses for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in our pre-clinical testing and clinical trials;

Current wording

third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in our pre-clinical testing, clinical trials and potential commercial supply;

Previous wording

Unrealized fair value gain (loss) on trading securities. Trading securities are recorded at fair value. Unrealized fair value gain (loss) on trading securities is related to changes in market pricing on the investments during the period.

Current wording

Unrealized fair value gain on trading securities. Trading securities are recorded at fair value. Unrealized fair value gain on trading securities is related to changes in market pricing on investments classified as trading securities during the period.

Previous wording

There have been no material changes in our critical accounting policies and significant judgments and estimates during the six months ended June 30, 2024, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” included in our 2023 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, or SEC, and with the securities commissions in British Columbia, Alberta and Ontario, or the Canadian Securities Commissions, on February 29, 2024. We believe that the accounting policies discussed in the Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

There have been no material changes in our critical accounting policies and significant judgments and estimates during the nine months ended September 30, 2024, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” included in our 2023 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, or SEC, and with the securities commissions in British Columbia, Alberta and Ontario, or the Canadian Securities Commissions, on February 29, 2024. We believe that the accounting policies discussed in the Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

Comparison of three and six months ended June 30, 2024 and 2023

Current wording

Comparison of three and nine months ended September 30, 2024 and 2023

Previous wording

The following table summarizes the results of our operations for the three and six months ended June 30, 2024 and 2023 together with changes in those items (in thousands):

Current wording

The following table summarizes the results of our operations for the three and nine months ended September 30, 2024 and 2023 together with changes in those items (in thousands):

Previous wording

The following table summarizes research and development expenses for the three and six months ended June 30, 2024 and 2023 together with changes in those items (in thousands):

Current wording

The following table summarizes research and development expenses for the three and nine months ended September 30, 2024 and 2023 together with changes in those items (in thousands):

Previous wording

Research and development expenses increased by $5.7 million and $10.4 million in the three and six months ended June 30, 2024, respectively, as compared to the same periods in 2023. The increases were primarily attributable to direct external costs related to our pre-clinical and discovery programs to advance multiple potential drug candidates targeting Kv7, Nav1.7 and Nav1.1, as well as personnel-related costs due to increased headcount to support late-stage development and stock-based compensation expense due to an increase in the number of options granted at a higher fair value, partially offset by a decrease in spend on XEN496. The decrease in XEN496 costs was attributed to decreased external costs to support the EPIK clinical trial and open label extension as a result of our decision in May 2023 to no longer pursue the clinical development of XEN496. For the six months ended June 30, 2024, the increase in our azetukalner program costs is driven by manufacturing activities to support current and future clinical trials and a potential NDA submission, partially offset by a decrease in direct external costs related to our X-NOVA Phase 2 MDD clinical trial which completed in 2023.

Current wording

Direct external costs related to azetukalner increased by $6.3 million and $8.4 million for the three and nine months ended September 30, 2024, respectively, primarily due to our ongoing Phase 3 epilepsy clinical trials, start-up costs for our Phase 3 MDD clinical trials, and manufacturing activities to support current and future clinical trials as well as our NDA submission, partially offset by a decrease in costs for our Phase 2 MDD clinical trial which completed in late 2023. The decrease in direct external costs related to XEN496 of $5.1 million for the nine months ended September 30, 2024 is due to our decision in May 2023 to no longer pursue the clinical development of XEN496. Pre-clinical and discovery program costs increased by $1.5 million and $4.8 million for the three and nine months ended September 30, 2024, respectively, related to the advancement of multiple potential drug candidates targeting Kv7, Nav1.7 and Nav1.1. Personnel-related costs increased by $6.3 million and $15.5 million for the three and nine months ended September 30, 2024, respectively, due to increased headcount to support late-stage development and an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.

Previous wording

The following table summarizes general and administrative expenses for the three and six months ended June 30, 2024 and 2023 together with changes in those items (in thousands):

Current wording

The following table summarizes general and administrative expenses for the three and nine months ended September 30, 2024 and 2023 together with changes in those items (in thousands):

Previous wording

General and administrative expenses increased by $7.8 million and $13.1 million in the three and six months ended June 30, 2024, respectively, as compared to the same periods in 2023. The increases were primarily attributable to personnel-related costs due to increased headcount to support our expanding research and development activities and future potential commercialization, stock-based compensation expense due to an increase in the number of options granted at a higher fair value and higher professional and consulting fees, including legal costs and pre-commercial expenses.

Current wording

The increase in personnel-related costs of $3.5 million and $12.3 million for the three and nine months ended September 30, 2024, respectively, was primarily due to increased headcount to support our expanding research and development activities and future potential commercialization as well as an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value. The increase of $3.6 million in professional and consulting fees for the nine months ended September 30, 2024 was primarily due to an increase in pre-commercial expenses and legal costs related to our ongoing business activities.

Previous wording

The following table summarizes our other income for the three and six months ended June 30, 2024 and 2023 together with changes in those items (in thousands):

Current wording

The following table summarizes our other income for the three and nine months ended September 30, 2024 and 2023 together with changes in those items (in thousands):

Previous wording

Other income increased by $2.9 million and $6.8 million in the three and six month periods ended June 30, 2024, respectively, as compared to the same periods in 2023. The increases were primarily attributable to an increase in interest income due to a higher balance of marketable securities and an increase in market yields on investments. This is partially offset by a decrease in the unrealized fair value gain on trading securities as we did not hold any marketable securities classified as trading securities during the three and six month periods ended June 30, 2024.

Current wording

The increase in interest income of $3.3 million and $13.6 million for the three and nine months ended September 30, 2024, respectively, was due to a higher average balance of marketable securities and higher average market yields on investments. The decrease of $3.4 million in unrealized fair value gain on trading securities for the nine months ended September 30, 2024 was due to the fact that we did not hold any marketable securities classified as trading securities during that period.

Previous wording

To date, we have financed our operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financing. Since our initial public offering through June 30, 2024, we have raised aggregate net cash proceeds of more than $1.3 billion primarily from the issuance of equity securities. As of June 30, 2024, we had cash and cash equivalents and marketable securities of $850.6 million.

Current wording

To date, we have financed our operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financing. Since our initial public offering through September 30, 2024, we have raised aggregate net cash proceeds of more than $1.3 billion primarily from the issuance of equity securities. As of September 30, 2024, we had cash and cash equivalents and marketable securities of $803.3 million.

Previous wording

We entered into an “at-the-market” equity offering sales agreement in August 2020, amended as of March 2022, with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated and a new prospectus supplement was filed with the SEC on March 1, 2022, or the March 2022 ATM, pursuant to which we may sell common shares having gross proceeds of up to $250.0 million, from time to time. As of June 30, 2024, an aggregate of 855,685 common shares have been sold for proceeds of $29.5 million, net of commissions and transaction expenses.

Current wording

We entered into an “at-the-market” equity offering sales agreement in August 2020, amended as of March 2022, with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated, or the ATM Program, and a new prospectus supplement was filed with the SEC on August 9, 2024, pursuant to which we refreshed the ATM Program and may sell common shares having gross proceeds of up to $350.0 million, from time to time. No common shares had been sold under the ATM Program during the nine months ended September 30, 2024.

Previous wording

We have incurred significant operating losses since inception. As of June 30, 2024, we had an accumulated deficit of $771.0 million. We expect to continue to incur significant expenses in excess of our revenue and expect to incur operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to incur significant expenses and increasing operating losses for the foreseeable future as we continue our research and pre-clinical and clinical development of our product candidates; expand the scope of our studies for our current and prospective product candidates; initiate additional pre-clinical, clinical or other studies for our product candidates; manufacture drug supply and drug product for clinical trials and commercialization; seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical studies; hire and retain additional personnel; seek to identify, and validate additional product candidates; acquire or in-license other product candidates and technologies; make milestone or other payments under our in-license or other agreements, including, without limitation, payments to 1st Order Pharmaceuticals, Inc and other third parties; maintain, protect and expand our intellectual property portfolio; establish a sales, marketing, distribution and other commercial infrastructure to commercialize any products for which we may obtain marketing approval; create additional infrastructure and incur additional costs to support our operations and our product development and planned future commercialization efforts; and experience any delays or encounter issues with any of the above.

Current wording

We have incurred significant operating losses since inception. As of September 30, 2024, we had an accumulated deficit of $833.8 million. We expect to continue to incur significant expenses in excess of our revenue and expect to incur operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to incur significant expenses and increasing operating losses for the foreseeable future as we prepare for the potential commercial launch of azetukalner; invest significantly to further develop azetukalner for our current and future indications; advance additional product candidates into pre-clinical and clinical development; seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials; manufacture larger quantities of our product candidates for clinical development and potential commercialization; hire additional commercial, clinical, scientific, management and administrative personnel; acquire or in-license other product candidates and technologies; make milestone or other payments under our in-license or other agreements, including, without limitation, payments to 1st Order Pharmaceuticals, Inc and other third parties; maintain, protect and expand our intellectual property portfolio; establish a sales, marketing, distribution and other commercial infrastructure to commercialize any products for which we may obtain marketing approval; create additional infrastructure and incur additional costs to support our operations and our product development and planned future commercialization efforts; and experience any delays or encounter issues with any of the above.

Previous wording

The following table shows a summary of our cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table shows a summary of our cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities totaled $75.9 million, compared to $67.6 million for the same period in 2023. The increase in cash used in operating activities was primarily related to higher research and development and general and administrative expenses, as well as changes in operating assets and liabilities. This was partially offset by higher interest income.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities totaled $127.0 million, compared to $115.7 million for the same period in 2023. The increase in cash used in operating activities was primarily related to higher research and development and general and administrative expenses, as well as changes in operating assets and liabilities. This was partially offset by higher interest income.

Previous wording

For the six months ended June 30, 2024, net cash provided by investing activities totaled $64.5 million, compared to $74.5 million for the same period in 2023. The change was driven primarily by an increase in the purchases of marketable securities, net of redemptions. This was partially offset by a decrease in the purchases of property, plant and equipment.

Current wording

For the nine months ended September 30, 2024, net cash provided by investing activities totaled $66.5 million, compared to $128.4 million for the same period in 2023. The change was driven primarily by an increase in the purchases of marketable securities, net of redemptions. This was partially offset by a decrease in the purchases of property, plant and equipment.

Previous wording

As of August 5, 2024, we had 75,764,505 common shares issued and outstanding, outstanding pre-funded warrants to purchase 2,173,081 common shares, outstanding stock options to purchase 10,656,473 common shares, outstanding PSUs convertible into 195,000 common shares and an outstanding warrant to purchase 40,000 common shares.

Current wording

As of November 8, 2024, we had 76,239,602 common shares issued and outstanding, outstanding pre-funded warrants to purchase 2,173,081 common shares, outstanding stock options to purchase 10,875,729 common shares, outstanding PSUs convertible into 210,000 common shares and an outstanding warrant to purchase 40,000 common shares.