Company's Q3 2025: Contradictions Emerge on Study Enrollment, Nav1.7 Efficacy, and Data Release Timelines

Guidance:

• Top-line XTOL-2 readout expected in early 2026; timing will be narrowed after the last patient completes the double-blind period.
• Positive XTOL-2 results would form the basis for an NDA submission for Ezetikelner in focal onset seizures.
• Company expects to have sufficient cash to fund operations into 2027 based on current plans.
• Phase 1 programs XEN1701 (Nav1.7) and XEN1120 (KV7) aim to complete SAD/MAD and, if supportive, move to phase 2 proof‑of‑concept next year.

Business Commentary:

* Clinical Trial Progress: - Xenon Pharmaceuticals completed baseline periods and randomized all 380 patients in the XTOL-2 study, exceeding the target of 360 patients. - The company remains on track for top-line data readout in early 2026. - This progress reflects the company's confidence in XTOL-2 and the strong translational potential from phase 2 data to phase 3.

• Financial Stability:
• As of September 30, 2025, Xenon reported cash, cash equivalents, and marketable securities totaling $555.3 million.
• The company anticipates having sufficient cash to fund operations into 2027, supporting multiple registration programs for Ezetikelner and continued maturation of the early-stage pipeline.

• This financial stability is attributed to strong fiscal management and the completion of Ezetikelner's phase 3 epilepsy study and supporting late-stage clinical development.

• Expansion into Neuropsychiatry:

• Xenon is advancing its clinical development programs into neuropsychiatry, focusing on major depressive disorder and bipolar depression.
• The company is conducting phase 3 trials evaluating Ezetikelner in patients with major depressive disorder and bipolar I and II depression.

• This expansion is driven by the strong preclinical, clinical, and genetic evidence supporting the development in these areas and the physician interest in new therapeutics with novel mechanisms of action.

• Early-Stage Pipeline Development:

• Both lead molecules in the Nav1.7 and KV7 programs, XEN1701 and XEN1120, are now in phase 1 first-in-human studies in healthy volunteers.
• These programs target pain, and Xenon is focused on leveraging mechanistic insights to develop precision therapies.
• The progress is driven by the need for opioid-sparing therapies and the potential of Nav1.7 inhibitors and KV7 potentiators in addressing the complexity and chronicity of pain.

Sentiment Analysis:

Overall Tone: Positive

• Management used optimistic language throughout: "we are optimistic for a positive outcome," cited "considerable progress" and "excitement continues to build," and noted ‘‘we anticipate having sufficient cash to fund operations into 2027,’’ highlighting confidence across clinical and financial plans.

Q&A:

• Question from Paul Matteis (Stifel): How much should we expect to be disclosed in the XTOL‑2 top‑line release on efficacy and safety, and if positive, what would be rate‑limiting to filing?
  Response: Top‑line will include key efficacy endpoints and overall safety/tolerability; XTOL‑2 efficacy results are the critical path to the NDA while much of the NDA text is already being prepared.

• Question from Tess Romero (JPMorgan): Where did screen failure rate land for XTOL‑2 and were reasons consistent with prior experience? How far behind will XNova‑2 results be relative to XTOL‑2; could it read out in 2026?
  Response: Screen/baseline failure rate tracked as expected (mostly insufficient seizures and standard inclusion/exclusion reasons) and is consistent with phase‑2 experience; XNova‑2 is expected to take ~2–2.5 years so a 2026 readout is unlikely at this time.

• Question from Brian Abrahams (RBC Capital Markets): How much efficacy will physicians trade off for benefits like tolerability/ease of use, and what learnings from Xenovimate launch inform expectations for AZK?
  Response: Efficacy alone doesn't determine commercial success; AZK's differentiated attributes (QD dosing, no titration, minimal DDIs, favorable tolerability and potential mood benefit) should drive adoption despite variability in placebo‑adjusted efficacy across ASMs.

• Question from Brian Skorney (Baird): For XCEED, why include both bipolar I and II and why use MADRS versus HAM‑D as primary endpoint?
  Response: XCEED stratifies BPD‑1 and BPD‑2 due to different mania/hypomania profiles; MADRS was chosen for bipolar by precedent in bipolar trials, whereas HAM‑D was selected for MDD based on lower variability and FDA support.

• Question from Jason Gerberry (Bank of America): Why enroll 380 vs planned 360 in XTOL‑2 and does that change powering? Any color on phase‑1 XEN1120/XEN1701 SAD/MAD timing and success criteria?
  Response: A late bolus of enrollments brought randomized total to 380; powering remains very high (≈99% for 25mg vs placebo) so impact is marginal; phase‑1 SAD/MAD for XEN1701/XEN1120 should wrap in early next year and success = acceptable safety/tolerability and exposures supporting predicted target engagement to justify phase‑2.

• Question from Cory Kasimov (Evercore ISI): If competitor early phase‑2 readouts hold, how would that affect AZK positioning; and how should we think about operating costs into 2026 given launch planning and additional phase‑3s?
  Response: Competitive readouts don't alter confidence — AZK has extensive long‑term data and unique KV7 profile while competitors are behind and lack placebo‑controlled data; operating expenses will rise in 2026 to prep for potential launch, but major commercial spend (sales force build) is expected to fall into 2027.

• Question from Mark Goodman (Leerink Partners): Will XTOL‑2 assess HAM‑D or MADRS for comorbid depression and what proportion of patients have depression? Also, can you provide more Nav1.7 selectivity detail?
  Response: XTOL‑2 collects patient‑reported depression/anxiety as exploratory endpoints using Beck Depression Inventory and GAD‑7 (not powered; baseline prevalence not shared); Nav1.7 candidates are described as highly selective with favorable free‑fraction/tissue distribution, though full preclinical selectivity data are being withheld for competitive reasons.

• Question from Joseph Thome (TD Cowen): How should we think about increased cenobamate use in phase‑3 versus phase‑2 and impact on response/tolerability; why no interim in MDD while bipolar has one?
  Response: Cenobamate use is expected to be higher in phase‑3 but preclinical combination studies and phase‑2 data show AZK combines well without altered tolerability; no interim in MDD because prior PoC informed design and confidence in powering, whereas bipolar includes a binary interim to allow sample size increase if more power is needed.

• Question from Andrew Chai (Jefferies): For BPD interim, what scenarios would lead to sample size changes and placebo‑adjusted deltas sought? If XTOL‑2 failed, how far behind is XTOL‑3 and could you still file an NDA in 2026?
  Response: The BPD interim is a binary assessment to determine if sample size should increase from 400 up to 470 to achieve >80% power to detect ~2‑point MADRS difference; XTOL‑3 lags XTOL‑2 (sites/effort prioritized to XTOL‑2) — if XTOL‑2 failed, management would accelerate XTOL‑3 where possible but an NDA filing in 2026 would likely not be feasible.

Contradiction Point 1

Study Enrollment and Patient Demographics

It involves differing statements about study enrollment and patient demographics, which are crucial for understanding the progress and design of clinical trials, potentially impacting clinical trial outcomes and regulatory submissions.

How quickly can you file based on the top-line FOS data, and what gives you confidence in avoiding safety issues seen in other drugs using this mechanism and target? - Jo Yi Chudy (Stifel, Nicolaus & Company, Incorporated)

2025Q3: We've recently completed patient recruitment, and the last patients will go through a baseline period, followed by the randomization visit. - Ian Mortimer(CEO)

Could X-TOLE2 have a larger study size, and what are the latest assumptions regarding the delta and dropout rate for the study? - Brian Corey Abrahams (RBC Capital Markets)

2025Q2: We believe one of the challenges in drug development is predicting human PK from animal PK. We'll get more information as we see data in humans. - Ian Mortimer(CEO)

Contradiction Point 2

Nav1.7 Inhibitor and Efficacy

It involves differing statements about the efficacy and selectivity of Nav1.7 inhibitors, which are key aspects of the drug's mechanism and potential success, impacting the development strategy and investor confidence.

What is the proportion of patients with comorbid depression in XTOL-2, and can you provide more information on Nav1.7 selectivity? - Padma Unvermark (Leerink Partners)

2025Q3: Our data shows our lead Nav1.7 inhibitor is highly selective for the 1.7 subunit with high free fraction and tissue distribution. - Ian Mortimer(CEO)

What is the profile of the 1701 molecule, and what is the first clinical pain model being considered for proof of concept? - Brian Peter Skorney (Baird & Co. Incorporated)

2025Q2: We believe one of the challenges in drug development is predicting human PK from animal PK. We'll get more information as we see data in humans. - Ian Mortimer(CEO)

Contradiction Point 3

Bipolar Depression Interim Analysis

It involves differing statements about the plans and expectations for the bipolar depression interim analysis, which is crucial for understanding the clinical trial strategy, potentially impacting regulatory submissions and market confidence.

What are the interim analysis scenarios for bipolar depression, and if XTOL-2 fails, how far behind is XTOL-3? - Andrew Chai (Jefferies)

2025Q3: The study is powered to detect a two-point difference, with a binary decision to increase sample size if more power is needed. - Chris Kenney

What are your thoughts on the interim analysis of bipolar depression and its efficacy compared to placebo, and can this study be considered a supporting pivotal study? - Lin Tsai (Jefferies LLC)

2025Q2: The interim analysis will occur based on recruitment, with a potential increase in study size up to 470 subjects. - Ian Mortimer

Contradiction Point 4

Top-line Data Release for XTOL-2

It involves expectations and timelines for the release of top-line data from the XTOL-2 study, which is crucial for strategic planning and investor expectations.

Can you outline the key data release, including efficacy and safety details, and what factors could delay filing if the data is positive? - Paul Matteis (Stifel)

2025Q3: We expect to report top-line results from our XTOL-2 study for bipolar depression in the fourth quarter. - Ian Mortimer(CEO)

Is enrollment in X-TOLE2 not yet complete? What are the details of the Phase III trial design for bipolar depression, including patient population and endpoints? - Tessa Romero (JPMorgan)

2024Q4: Our guidance continues to be that we'll have top line data in the second half of the year. - Ian Mortimer(CEO)

Contradiction Point 5

Enrollment in the Phase III Epilepsy Study

It involves the progress of enrollment in the Phase III epilepsy study, which impacts timelines for data availability and regulatory submissions.

How much efficacy are physicians willing to trade for other benefits like tolerability, ease of use, and other advantages? What lessons have been learned from Xenovimate? - Brian Abrahams (RBC Capital Markets)

2025Q3: We expect to enroll 170 patients into XTOL-3, an open-label trial assessing the long-term safety, efficacy, and tolerability of Ezeetkilner, now that we have identified the optimal starting dose. - Ian Mortimer(CEO)

Regarding the first Phase III epilepsy trial, how close are you to full enrollment? Is the data still expected in Q3, or is Q4 now more likely? - Paul Matteis (Stifel)

2024Q4: We're comfortable with the guidance that we have right now, which is Phase III epilepsy data in the second half of the year. That hasn't changed. - Ian Mortimer(CEO)