Xenon(XENE) - 2025 Q2 - Quarterly Results

Executive Summary Xenon Pharmaceuticals reported Q2 2025 financial results and business updates, highlighting significant clinical progress and pipeline advancements Second Quarter 2025 Financial Results & Business Update Xenon Pharmaceuticals reported its financial results for the second quarter ended June 30, 2025, alongside a comprehensive business update, highlighting significant progress in its clinical development programs and early-stage pipeline - Xenon Pharmaceuticals Inc. reported financial results for Q2 2025 and provided a business update[3] CEO Statement CEO Ian Mortimer announced completed patient recruitment for azetukalner's Phase 3 X-TOLE2 study, with early 2026 results expected, and highlighted progress in other Phase 3 and early-stage programs - Patient recruitment for Phase 3 X-TOLE2 study of azetukalner is complete, with topline results expected in early 2026[4] - Phase 3 programs for azetukalner are underway in bipolar depression (X-CEED) and major depressive disorder (X-NOVA)[4] - Two first-in-human studies are ongoing within the Kv7 and Nav1.7 early-stage programs, targeting epilepsy, depression, and pain[4] Business Highlights and Clinical Development This section details Xenon's clinical development progress for azetukalner across epilepsy and neuropsychiatric programs, alongside early-stage pipeline advancements and corporate updates Azetukalner Clinical Development Azetukalner, a Kv7 potassium channel opener, is Xenon's most advanced clinical asset, with significant progress across its Phase 3 programs for epilepsy and neuropsychiatric disorders, including completed recruitment for a pivotal epilepsy study and initiation of multiple studies for depression - Azetukalner is a novel, highly potent, selective Kv7 potassium channel opener in late-stage clinical development for multiple indications[5] Epilepsy Programs The Phase 3 X-TOLE2 study for focal onset seizures (FOS) has completed patient recruitment, with topline data expected in early 2026, while enrollment continues for the X-TOLE3 FOS study and the X-ACKT study for primary generalized tonic-clonic seizures (PGTCS) - Phase 3 X-TOLE2 clinical study of azetukalner in FOS has completed patient recruitment; topline data anticipated in early 2026[7][8] - Phase 3 X-TOLE3 clinical study in FOS and X-ACKT clinical study in PGTCS continue to enroll patients[8][13] - Four abstracts related to epilepsy were accepted for presentation at the 36th International Epilepsy Congress (IEC)[13] Neuropsychiatric Programs Xenon has initiated Phase 3 clinical trials for azetukalner in major depressive disorder (MDD) with X-NOVA2 and X-NOVA3, and in bipolar depression (BPD) with the X-CEED study - X-NOVA2 and X-NOVA3, the first two of three planned Phase 3 clinical trials for azetukalner in MDD, are underway and screening patients[7][13] - X-CEED, the first of two planned Phase 3 clinical studies for azetukalner in BPD I and BPD II depression, has been initiated[7][13] Early-Stage Pipeline: Next-Generation Ion Channel Modulators Xenon is actively expanding its early-stage portfolio, leveraging expertise in potassium and sodium channel therapeutics with a goal to file multiple INDs in 2025, including Phase 1 studies for Kv7 and Nav1.7 channel openers for pain, and IND-enabling studies for a Nav1.1 candidate for Dravet Syndrome - Xenon aims to file multiple INDs (or equivalent) in 2025, leveraging expertise in potassium and sodium channel therapeutics[9] - Phase 1 studies are underway for XEN1120 (Kv7 channel opener) and XEN1701 (Nav1.7 development candidate) for pain[7][13] - Nav1.1 lead candidate is expected to enter IND-enabling studies in 2025, targeting Dravet Syndrome[13] Partnered Program A Phase 1 study is ongoing for NBI-921355, a selective inhibitor of voltage-gated sodium channels Nav1.2 and Nav1.6, developed in collaboration with Neurocrine Biosciences for certain types of epilepsy - A Phase 1 study is underway for NBI-921355, a selective inhibitor of Nav1.2 and Nav1.6, in collaboration with Neurocrine Biosciences for epilepsy[10] Corporate Updates Xenon appointed Darren Cline as Chief Commercial Officer to lead the company's transition to a commercial-stage entity in anticipation of azetukalner's launch, and also plans to host R&D webinars focusing on its early-stage pipeline - Darren Cline was appointed Chief Commercial Officer to lead the commercial build and anticipated launch of azetukalner[7][11] - Xenon plans to host multiple R&D webinars, with the first on October 2, 2025, focusing on pain treatments targeting Nav1.7 and Kv7[13] Second Quarter Financial Performance This section details Xenon's Q2 2025 financial results, including cash position, R&D expenses, G&A expenses, other income, and net loss Cash Position and Runway Xenon's cash, cash equivalents, and marketable securities totaled $624.8 million as of June 30, 2025, a decrease from $754.4 million at December 31, 2024, with the company anticipating this cash position will fund operations into 2027 Cash and Marketable Securities (in thousands of U.S. dollars) | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------------ | :------------ | :------------------ | :----- | | Cash and cash equivalents and marketable securities (current) | $487,545 | $626,905 | $(139,360) | | Marketable securities (long-term) | $137,297 | $127,496 | $9,801 | | Total Cash and Marketable Securities | $624,842 | $754,401 | $(129,559) | - Based on current operating plans, Xenon anticipates having sufficient cash to fund operations into 2027[12] Research and Development Expenses Research and development expenses significantly increased to $75.0 million for Q2 2025, up $25.3 million from $49.7 million in Q2 2024, primarily due to ongoing azetukalner Phase 3 clinical trials in epilepsy and MDD, start-up costs for the BPD trial, and increased personnel-related costs Research and Development Expenses (in thousands of U.S. dollars) | Period | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | R&D Expenses | $74,985 | $49,702 | +$25,283 | - The increase was primarily attributable to ongoing azetukalner Phase 3 clinical trials in epilepsy and MDD, start-up costs for the BPD clinical trial, and increased personnel-related costs[18] General and Administrative Expenses General and administrative expenses remained relatively stable at $19.2 million for Q2 2025, compared to $19.4 million for the same period in 2024 General and Administrative Expenses (in thousands of U.S. dollars) | Period | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | G&A Expenses | $19,244 | $19,402 | $(158) | Other Income Other income decreased by $2.0 million to $8.9 million for Q2 2025, down from $10.8 million in Q2 2024, mainly due to lower interest income, partially offset by an increase in foreign exchange gain Other Income (in thousands of U.S. dollars) | Period | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Other Income | $8,897 | $10,847 | $(1,950) | - The decrease was primarily attributable to lower interest income, partially offset by an increase in foreign exchange gain[18] Net Loss The net loss for Q2 2025 increased to $84.7 million, compared to $57.9 million for the same period in 2024, primarily driven by higher research and development expenses and lower interest income Net Loss (in thousands of U.S. dollars, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Net Loss | $(84,706) | $(57,924) | $(26,782) | | Net Loss per Common Share | $(1.07) | $(0.75) | $(0.32) | - The increase in net loss was primarily attributable to higher research and development expenses driven by the azetukalner program, increased personnel-related costs, and lower interest income[18] Detailed Clinical Program Descriptions This section provides in-depth details on the design and primary endpoints of azetukalner's Phase 3 clinical programs for epilepsy, major depressive disorder, and bipolar depression Azetukalner Phase 3 Epilepsy Program Details Xenon's Phase 3 epilepsy program for azetukalner includes three clinical trials for focal onset seizures (FOS) and primary generalized tonic-clonic seizures (PGTCS), which are randomized, double-blind, placebo-controlled studies evaluating 15 mg or 25 mg of azetukalner as adjunctive treatment, with the primary endpoint being the median percent change in monthly seizure frequency - The Phase 3 epilepsy program includes three clinical trials for FOS and PGTCS, designed after the Phase 2b X-TOLE trial[15] - X-TOLE trials for FOS evaluate 15 mg or 25 mg of azetukalner in approximately 360 patients, with the primary endpoint being median percent change in monthly seizure frequency[15] - X-ACKT for PGTCS evaluates 25 mg of azetukalner in approximately 160 patients, with a similar primary efficacy endpoint[15] Azetukalner Phase 3 MDD X-NOVA Program Details The Phase 3 MDD program for azetukalner consists of three multicenter, randomized, double-blind, placebo-controlled trials, each evaluating 20 mg of azetukalner as monotherapy in approximately 450 patients with moderate-to-severe MDD, with the primary efficacy endpoint being the change from baseline in HAM-D17 score at week 6 - The Phase 3 MDD program includes three multicenter, randomized, double-blind, placebo-controlled clinical trials[16] - Studies evaluate 20 mg of azetukalner as monotherapy in approximately 450 patients with moderate-to-severe MDD[16] - The primary efficacy endpoint is the change from baseline in the HAM-D17 score at week 6[16] Azetukalner Phase 3 BPD X-CEED Program Details Xenon's Phase 3 BPD program for azetukalner involves two multicenter, randomized, double-blind, placebo-controlled clinical trials, assessing 20 mg of azetukalner as monotherapy in approximately 400 patients with bipolar depression (BPD) I or II, with the primary efficacy endpoint being the change from baseline in the MADRS score at week 6 - The Phase 3 BPD program includes two multicenter, randomized, double-blind, placebo-controlled clinical trials[17] - Studies evaluate 20 mg of azetukalner as monotherapy in approximately 400 patients with BPD I or II[17] - The primary efficacy endpoint is the change from baseline in the MADRS score at week 6[17] Company Overview and Investor Information This section provides an overview of Xenon Pharmaceuticals, details conference call information, includes a safe harbor statement, and lists contact information About Xenon Pharmaceuticals Inc. Xenon Pharmaceuticals is a neuroscience-focused biopharmaceutical company dedicated to drug discovery, clinical development, and commercialization, with its lead molecule, azetukalner, in Phase 3 trials for epilepsy, MDD, and BPD, complemented by an early-stage pipeline of potassium and sodium channel modulators for pain - Xenon Pharmaceuticals is a neuroscience-focused biopharmaceutical company[19] - Azetukalner, a Kv7 potassium channel opener, is in Phase 3 clinical trials for epilepsy, MDD, and BPD[19] - The company is also advancing an early-stage portfolio of Kv7 and Nav1.7 programs in Phase 1 development for pain[19] Conference Call Information Xenon hosted a conference call and webcast on August 11, 2025, at 4:30 pm ET to discuss its second quarter 2025 results, with replay access available on the Investors section of the company's website - Xenon hosted a conference call and webcast on August 11, 2025, at 4:30 pm ET to discuss Q2 2025 results[14] - A listen-only webcast can be accessed on the Investors section of the Xenon website, with a replay available[14] Safe Harbor Statement This section contains forward-looking statements regarding clinical trial timing and results, product candidate efficacy, regulatory success, and commercial potential, cautioning readers about inherent risks and uncertainties that could cause actual results to differ materially from projections - The press release contains forward-looking statements regarding clinical trials, product efficacy, regulatory approvals, and commercial potential[20] - These statements are subject to risks and uncertainties, including potential failures in clinical trials, incorrect assumptions on funding, and regulatory delays[20] - Readers are cautioned not to place undue reliance on forward-looking statements, and the company assumes no obligation to update them[20] Contacts Contact information for investor relations and media inquiries is provided for Xenon Pharmaceuticals Inc - Contact details for Investor Relations (Chad Fugere) and Corporate Affairs (Colleen Alabiso) are provided[22] Condensed Consolidated Financial Statements This section presents Xenon's condensed consolidated balance sheets and statements of operations and comprehensive loss for the reported periods Condensed Consolidated Balance Sheets The balance sheet shows a decrease in total assets and shareholders' equity from December 31, 2024, to June 30, 2025, primarily driven by a reduction in cash and marketable securities, while total liabilities also saw a slight decrease Condensed Consolidated Balance Sheets (in thousands of U.S. dollars) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :------------------ | | Cash and cash equivalents and marketable securities (current) | $487,545 | $626,905 | | Other current assets | $12,707 | $8,359 | | Marketable securities, long-term | $137,297 | $127,496 | | Other long-term assets | $36,732 | $35,379 | | Total assets | $674,281 | $798,139 | | Accounts payable and accrued liabilities | $31,588 | $34,221 | | Other current liabilities | $1,459 | $1,369 | | Other long-term liabilities | $7,256 | $7,646 | | Total liabilities | $40,303 | $43,236 | | Shareholders' equity | $633,978 | $754,903 | | Total liabilities and shareholders' equity | $674,281 | $798,139 | Condensed Consolidated Statements of Operations and Comprehensive Loss The statements show an increased net loss for both the three and six months ended June 30, 2025, primarily driven by higher research and development expenses, with revenue remaining at zero for the quarter but showing $7.5 million for the six-month period in 2025 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands of U.S. dollars, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $— | $— | $7,500 | $— | | Research and development | $74,985 | $49,702 | $136,185 | $93,952 | | General and administrative | $19,244 | $19,402 | $38,282 | $34,193 | | Total operating expenses | $94,229 | $69,104 | $174,467 | $128,145 | | Loss from operations | $(94,229) | $(69,104) | $(166,967) | $(128,145) | | Other income | $8,897 | $10,847 | $17,015 | $22,369 | | Net loss | $(84,706) | $(57,924) | $(149,753) | $(105,855) | | Net loss per common share: Basic and diluted | $(1.07) | $(0.75) | $(1.90) | $(1.36) | | Weighted average common shares outstanding: Basic and diluted | 78,953,445 | 77,671,128 | 78,820,474 | 77,632,864 |