Xenon Pharmaceuticals Inc. (XENE) Earnings Call Transcript & Summary

Welcome, everyone, to the 44th Annual J.P. Morgan Healthcare Conference. My name is Tessa Romero, and I'm one of the senior biotech analysts here at J.P. Morgan. Our next presenting company is Xenon Pharmaceuticals. And presenting on behalf of the company, we have President and CEO, Ian Mortimer. Ian, over to you.

Thank you, Tess. Good morning, everyone. Great to be here, kick off the year at J.P. Morgan and a really big update for Xenon. It's been a very important and impressive year over the last 12 months. And now we're right on the doorstep of our first Phase III clinical data. So we'll go through that today. I'm joined by some of my colleagues here. To my immediate left, Chris Kenney, our Chief Medical Officer; and to his left, Darren Cline, our Chief Commercial Officer; and Tucker Kelly, our CFO, is here as well. Tucker and Darren are newer members of the team who have joined over the last 12 months. Both have significant experience in forward integration into a commercial organization, which is our strategic goal. So really nice to have them as part of the Xenon team here at J.P. Morgan this year. I will be making some forward-looking statements, so I do refer you to all of our risk factors that are filed with the SEC. So let's get started. Today, we're going to spend time talking about our lead molecule, azetukalner, both in epilepsy and in psychiatry. This is the most advanced potassium channel modulator in late-stage clinical development today and really the only KV program that has unblinded clinical data in over 800 patient years of both efficacy and safety data. So I'll go through a number of those points throughout the presentation. We also have a really nice emerging earlier-stage pipeline that I'm going to spend some time on. We've got 2 Phase I molecules right now that eventually will be developed in the pain space. So I'm going to actually show a little bit of data and updates on one of those programs this morning. So if we look at our pipeline, there's really 3 key areas of today's presentation. I'm going to talk most of the presentation on our lead molecule, which is azetukalner. We have 6 ongoing double-blind Phase III clinical trials for AZK. That's what we call the shortened version of azetukalner, 3 in epilepsy and 3 in neuropsychiatry. So today, we'll spend time on the epilepsy program. We'll spend time on the psychiatry program. And then as I mentioned, the third thing is to give an update on some of our earlier-stage molecules that have transitioned now into human-clinical development. So if we start with azetukalner just more broadly before I get into the epilepsy program, the feedback we're getting from physicians, both in the psychiatry space as well as in the epilepsy space is there's high anticipation for a drug with a novel mechanism. So there are no potassium channel modulators available, either in epilepsy or in psychiatry. The other feedback we get are really the attributes of the drug. This drug is easy to administer. It's a QD drug, so once a day daily dosing and no titration. A lot of neurology drugs and drugs in the CNS, you have to start low and go slow. You're on a therapeutic dose on day 1 for azetukalner. We also have no meaningful DDIs, so we don't have to make adjustments to other background medications. The drug is backed by a significant amount of clinical data already. As I mentioned, we've been in over -- we have over 800 patient years just in patients with focal onset seizures. We have some patients that have been dosed for more than 5 years now. So I'll go through both the clinical data as well as the safety profile of the drug, both in -- both in epilepsy as well as in neuropsychiatry. So let's start on the epilepsy side. So if we just take a quick look at the epilepsy market. So epilepsy is actually more common than I think many people recognize. It's the fourth most common neurological condition. You have a 1 in 26 lifetime risk of developing epilepsy. If you look at the right, it's a breakdown of the different epilepsy subtypes. There's about 3 million Americans that have epilepsy. The most common form is focal onset seizures or about 60% of the market. In terms of the generalized epilepsy market, the most common form of generalized epilepsy are these patients with primary generalized tonic-clonic seizures. And for azetukalner, as you'll see throughout the presentation, we're developing the drug both in FOS as well as in PGTCS, so the most common forms of epilepsy. What we find when we do all of our primary and secondary market research is about half of the patients are not getting good treatment today. So there are many drugs available to treat epilepsy. We recognize that. This is a novel mechanism and about half of the patients are still requiring better therapy, either because of efficacy or because of side effects. So the total addressable market that we think for a branded ASM in the conditions that we're developing is about 1 million patients in the U.S. Our excitement and our confidence in epilepsy really is off of our Phase IIb trial that we unblinded in 2021, really underpinning our key leadership position in the epilepsy space. So this was our X-TOLE study. This was a study where we randomized 325 subjects. It was a 4-arm study, 3 active doses and placebo. And now we're following those patients in open-label extension, and I'll go through both the double-blind data as well as the OLE data in today's presentation. So if we first look at the efficacy data that we unblinded, so there's 2 different graphs on this slide. On the left is what we call the MPC. So this is looking at the percent reduction in seizures. This is the key primary endpoint for FDA. And on the right is a responder analysis. So this is the percent of patients that have at least a 50% reduction in their seizure burden when we compare the double-blind period to the baseline period. And that's the key primary endpoint for European health regulators. I'm just going to focus on the left for a second, but you can see it on both graphs. There's a clear dose response. So as we move from 10 to 20 to 25 milligrams, you get a deepening of the seizure reduction in the response. You'll also notice that we had p-values of less than 0.05 at all seizure reduction endpoints, all doses and obviously, even more significant p-values as you move up in dose. If we just look at the 25-milligram dose on the left, that was the 52.8% reduction in seizures, and the placebo can adjust that. So the high dose minus placebo, that placebo-adjusted MPC, this is the greatest reduction in seizures ever seen in an FOS study that's been unblinded in a patient population that has been the most severe or most refractory that's ever been tested based on our review of the literature. And we look at that severity of patients based on 3 different measures. We look at the number of drugs that these patients have failed, the number of background medications they are coming on to study as well as their baseline seizure burden. And the median patient in our Phase II program had failed 6 drugs. They were on 3 background medications, and they had 13.5 seizures for 28 days, so quite a severe population. Another thing that we looked at in the Phase II program, and we're going to look at in Phase III is also the rapidity of onset. So this is a similar analysis to the last slide. The last slide was on a monthly basis. This is looking at the data on a weekly basis, so what you'll see on the left graph, it's again, we're looking at both the reduction in seizure as well as the responder analysis. But just focusing on the left graph for a minute, you'll see quite a deep response at week 1. So all doses were statistically significant or less than 0.05 at week 1. So not only do we see a deepening of response over time, but you see a rapidity of onset. And for these patients that are having breakthrough seizure for them to have an immediate seizure reduction within days or within the first week of being on drug is really important for these patients. As I mentioned, we continue to follow these patients in open-label extension. What started as a 1-year OLE has been extended to a 3, 5 and now a 7-year open-label extension. So we have a huge amount of both efficacy and safety data in the long term. At the American Epilepsy Society meeting every December, we mature these data, and we show these data to the epilepsy community and get feedback. So this is the 48-month data that we presented last month at the AES meeting. A couple of key messages from this slide. One, overall, we're getting over a 90% reduction in seizure burden for the population. But as I mentioned, this was a very severe and refractory population. So we -- actually, if we look at those patients that were on fewer background medications, either 1 or 2 background ASMs, you have a 100% reduction in seizure burden for these patients. So they're not having any seizures at all. So it's quite remarkable when we look at the overall. What's also interesting to notice is not only do we get a reduction immediately as we talked about at week 1, but it looks like that response is deepening over time. It looks like there's a deepening of the response a few months into the open label and then again, as we look out about 12 months or so. We've also been looking at seizure freedom. I wouldn't say there's a consensus definition for seizure freedom. But overall, when we talk to epileptologists and neurologists, patients being seizure-free for 12 months is incredibly important. This provides patients independence because in most jurisdictions, if you have no seizures over a 12-month period, you can drive again. So we're looking at all of the patients in our open label that have been dosed for 48 months. And what you'll see about 2 in 5 patients or just under 40% have had 12 months of seizure freedom. So if you remember, these patients were having a seizure every other day, and now we're getting these long periods of seizure freedom with the medicine. And what we're hearing back from physicians, their patients are gaining more independence. They're working more, they're having more social interactions. Not shown on this graph, but if you look at our AES data from last month, we also looked at those patients that had a breakthrough seizure. And this was an analysis that we don't believe ever has been done before. So people can have a breakthrough seizure for a number of different reasons. It could be a mismedication. It could be a change something in their lives. And what we found is that if you have a breakthrough seizure on azetukalner, you can regain seizure freedom for long periods of time, and the majority of patients can regain seizure freedom for 6 or more months. So I think that's really important as we start to think about this drug in the real world. Patients are not going to necessarily be seizure-free forever. But if they have a breakthrough seizure, they should remain on therapy and they can do well over longer periods of time. So what I've really shown over the last number of slides is a huge amount of efficacy data overall for azetukalner in epilepsy. When we look at safety and tolerability, this drug is very active in the CNS, and it has an adverse event profile that you would expect for a drug that's consistent with other ASMs and consistent with a drug that's active in the central nervous system. So we do see treatment-emergent adverse events, things like dizziness and somnolence, many of these in a dose-dependent manner. But overall, the safety profile is something that we're very comfortable with, and the feedback we've had from treating physicians as well. Also nice to know is that we're not seeing new adverse events in open-label extension. As we mentioned, we now have patients that have been on the drug for more than 5 years, and we have the safety profile in open-label extension, is consistent with the safety profile that we see in the double-blind period. All of these data have given us a huge amount of confidence to go into a large Phase III program. This Phase III program was started a few years ago after an end of Phase II meeting with FDA. In focal onset seizures, we're running 2 Phase III clinical trials in parallel. They're exactly the same, X-TOLE2 and X-TOLE3, 2 active doses of the drug versus placebo. Each study was targeted to randomize 360 subjects. For X-TOLE2, we have completed randomization. We've randomized 380 subjects. Randomizations were complete last fall. The last few patients are just going through their final follow-up visits. We'll be analyzing the data. And as we guided this morning, we'll have our first Phase III clinical readout in March of this year. X-TOLE3 is a little bit behind, but we did have an important announcement this morning as well. We've completed an ethnobridging bridging study, a Phase I study in Japanese subjects. And we had -- last fall, we had a meeting with the PMDA, the Japanese health regulator. And we're now including Japanese subjects into X-TOLE3. So of the 360 subjects, 60 of them will be Japanese subjects. And what's really important here is we're not going to have to run separate Phase III clinical trials in Japan. We can incorporate that into the global Phase III program, into X-TOLE3. The non-Japanese subject enrollment will be completed this year. That was another update and milestone we announced this morning, and then we'll incorporate Japanese sites and Japanese subjects into X-TOLE3 as well. As I mentioned, we're continuing to do work outside of FOS, and we have an ongoing Phase III clinical trial in primary generalized tonic-clonic seizures. What's a little bit different on this approach versus what other companies have done in epilepsy is we're running this study in parallel with our FOS study. Very common, you choose your high dose to randomize versus placebo. This is 25 milligrams versus placebo, a sample size of about 160. These studies do take a little bit longer than the FOS study. So the study continues to recruit and randomize patients. So that's the update on epilepsy, really exciting time to be on the doorstep of unblinding our first Phase III clinical trial with top line data, as I mentioned, in March of this year. So if we now expand the azetukalner opportunity outside of epilepsy and give an update in neuropsychiatry, we ran a smaller Phase II study. This was really more signal finding what we would call a proof-of-concept study in MDD, so a smaller study that unblinded in the fall of 2023. We were looking at 2 active doses of the drug, 10 and 20 milligrams versus placebo. Key primary endpoint was a clinical scale of depression called the MADRS scale. This drug works in the reward circuitry in the brain. So one of the -- based on the preclinical data and some other clinical data that was generated, we've also been looking at a scale of anhedonia, and this scale is called the SHAP scale. So I'll walk through the data from the Phase II study, which supports us moving into the large Phase III program in major depressive disorder that we have ongoing. So if we look at the MADRS, this was the primary endpoint. A couple of key points from this slide. One, you see a clear dose response. So the 10-milligram arm outperformed placebo and the 20-milligram arm outperformed the 10-milligram arm at every time point. What you'll actually see, again, very consistent with epilepsy, you see that rapid response immediately. This is really important in depression. Many of the drugs that are used to treat depression right now take weeks, if not months, to show an effect. So to be able to have early onset of efficacy is important. We were able to show that in this study as well. We had about a 3-point separation on MADRS between the top dose of 20 milligrams versus placebo, a little bit of a high placebo rate in this study and a p-value based on sample size of 0.135. Interesting, we looked at a different scale of depression, which is called the HAM-D17 scale. And we also had a 3-point separation, but a p-value less than 0.05. And the reason that was based on variability. So what we saw when we looked at HAM-D17 is we saw less variability in that endpoint compared to the MADRS scale. And so now in Phase III, we're looking at HAM-D17 as the primary endpoint. As I mentioned, we looked at a clinical scale of anhedonia called the SHAP scale. Again, very similar. We saw a clear dose response and separation between the 2 active doses and placebo, about a 2.5-point difference between active and placebo at the high dose and also a p-value of less than 0.05. When we looked at the safety and tolerability data in depression, this is actually quite surprising to us. It looks like the tolerability profile is a little bit softer in the depression patients versus the epilepsy patients. Obviously, this is a cross-trial comparison. But overall, it was quite a benign adverse event profile in depression. And importantly, when we think about depression, we didn't see any notable weight gain and no notable sexual dysfunction, and we do see that with some of the current standard of care. So when we think about our approach in psychiatry, a novel mechanism, rapidity of onset and having a different adverse event profile is the feedback that we're receiving from the psychiatry community is really important in the advancement of this new medicine. So we now are in a large Phase III program in major depressive disorder, 2 ongoing Phase III clinical trials currently, X-NOVA2 and X-NOVA3, a significant number of differences that we made between the Phase II program and Phase III. Obviously, a huge increase in sample size, 1:1 randomization using HAM-D17 as the primary endpoint as well as we're looking at patients that are a little bit more severe coming into study. So that cutoff of patients to get into study is a more severe depressed population. We also announced this morning, execution on these studies have been going really well, and we'll have X-NOVA2 data in the first half of next year. We've expanded in neuropsychiatry beyond major depressive disorder, also into bipolar depression, really significant unmet medical need in bipolar depression, fewer mechanisms and fewer drugs available for these patients. So we started a study midyear last year called the X-CEED study, where we're looking at patients with both bipolar I and bipolar II. We're looking at scales of clinical depression as measured by MADRS, single dose of 20 milligrams versus placebo. So as I mentioned, we also wanted to give an update. Obviously, a huge amount of the focus for investors is on azetukalner, both in epilepsy as well in psychiatry, but we made some great progress on the early-stage portfolio, and I wanted to provide an update this morning. So I'm going to focus on our NaV1.7 program. We do have a second program that's targeting a potassium channel, called KV7 that's also in a Phase I clinical trial. But today, in the interest of time, we're going to focus on our NaV1.7 program. The genetics of NaV1.7 are absolutely remarkable, and Xenon led some of this work about 20, 25 years ago. The history of the company started as a genetics company. These patients in a gene called SCN9A, which encodes for a protein called NaV1.7. If you're complete loss of function for NaV1.7 or even a partial loss of function of about 75% to 85% loss of function, these patients feel no pain. They feel no pain regardless of noxious stimuli. There's also gain of function in the channel. So if you have too much activity in NaV1.7, you feel non-precipitated severe pain, and there's a genetic condition called inherited erythromelalgia, where these people have extreme pain in their extremities. So it was an absolutely remarkable genetic target when it was identified about 25 years ago. And for years, pharma, almost every of the large pharma companies were trying to drug this target. It's proven to be very challenging to target from a chemistry point of view. And I think we've really made a breakthrough over the last couple of years. So some of the challenges with the first -- what we would call kind of the first and second-generation molecules against NaV1.7. One, we didn't have the potency and selectivity. So they didn't have isoform sub-selectivity on the sodium channels. So we need to selectively hit NaV1.7 while not hitting the other isoforms. Many of the drugs also had significant protein binding, so they didn't have enough free fraction to interact with the target. And many of them were restricted to the peripheral nervous system. So they didn't act centrally. And if we want to mimic the human genetics, which what we're trying to do as a novel analgesic, we believe we have to mimic where the target is, which is both in the peripheral nervous system as well in the central nervous system. So what we've been saying is that our lead molecule, XEN1701, which is now in a Phase I clinical trial, has a profile that addresses all of these limitations and has a profile that's never been tested in a human clinical trial previously. Here's just a little bit of the early preclinical data. What you'll see on the left -- on the left part of the slide, on the graph is that we have molecules and specifically 1701, but other molecules and other chemistries that are order of magnitude is more potent than the previous drugs that were targeting NaV1.7, shown here is both a Pfizer molecule as well as a Genentech molecule, which was actually our drug in collaboration with Genentech. We had a large collaboration with Genentech, Roche for many years. So we have significant increases in potency and significant increases in selectivity as well. What the right graph shows is that we need to get into the brain. So if you can get into the brain and you can have free drug in the brain, that can drive efficacy. So that's important for the profile overall. And what we announced this morning, which I think is incredibly exciting, we're partway through the Phase I clinical trial, but we've already reached exposures in the SAD portion of the study that are above concentrations predicted to mimic the human genetics. So we don't believe that something like this has ever been seen in a healthy volunteer study. We will wrap up these Phase I studies later this year, and we're excited to get into a proof-of-concept study, probably something like bunionectomy before the end of 2026. So in addition to the work on azetukalner, really nice progress on the early-stage pipeline as well. So just to wrap up in milestones before we hit Q&A. As I said, it's been a really important year of execution for Xenon across a number of our clinical trials. We have 6 ongoing Phase III clinical trials for azetukalner in both epilepsy and in psychiatry. The first of those is going to read out in March of this year, which is our X-TOLE2 study in focal onset seizures. That will be followed by a number of clinical readouts in the coming quarters and coming years, both in epilepsy and in psychiatry. And we have a really nice maturing early-stage portfolio and pipeline as well and some really nice progress on our NaV1.7 program. So thanks very much. An exciting year for Xenon coming up. And Tess, I'll pass it back to you for Q&A.

Okay. Thank you, Ian. So I thought I'd actually start our conversation with a little bit of a bigger picture strategic question for you. Just around how you think about investment and balancing it across azetukalner in epilepsy, but also neuropsychiatry and maximizing the value there, but also expanding some of your pipeline?

Yes. I think it's a great question. A couple of comments. One, we've been really clear on what our strategic objective is. We want to be a fully integrated biopharma company. We want to discover, develop and commercialize our own molecules. We have deep expertise. I didn't mention this at the beginning, in drugging ion channels in the CNS. We've been doing this for many, many years. I think that expertise is world-class. So obviously, a huge amount of focus is on azetukalner. That's where the vast majority of our effort is, the vast majority of our spend is. And not only are we going to have our FOS X-TOLE3 -- X-TOLE2 readout in March of this year, that will be followed by a new drug application in the second half of this year and put us in a position to get our very first drug approved. But as you mentioned, we really want to build a world-class company, which means we have to think about the portfolio. That's both the expansion of azetukalner into psychiatry, but also the early-stage portfolio. And as I mentioned, 2 molecules transitioned in the Phase I clinical trials last year, and you'll see more molecules transition from our labs into human clinical development over the coming years.

So we know now that top line results from the Phase III X-TOLE2 trial are expected in March. And quite frankly, I feel like we've been talking about this trial and expectations for a long time. But I'll just ask it to be complete here. What would you consider a win in terms of efficacy and safety here? And how could the longer treatment duration, 12 weeks versus 8 weeks in X-TOLE impact the results?

Sure. I'm happy to start and make a few comments, but I think Chris should provide his perspective, and then I want Darren to weigh in as well as we think about just the overall profile and the importance of that from a commercial perspective. So you've asked a couple of questions in there. One, one of the principles that we had at Xenon given the great success we had in our Phase IIb X-TOLE study is that X-TOLE2 and X-TOLE3 should be very similar studies. And so if you look at the inclusion and exclusion criteria, the Phase III program is exactly the same as the Phase II program. You did mention one difference. And one difference is that the double-blind period is 12 weeks in Phase III, it was 8 weeks in Phase II. When we look at the open-label data, it actually looks like those patients continue to have a deeper response over time. So I think moving from 8 weeks to 12 weeks, we're very comfortable with the 12-week double-blind period overall. In terms of just kind of managing expectations going into data, obviously, that's a question we get a lot. I think you did a really nice work, Tess, in your preview for Xenon coming into the conference and coming into our X-TOLE2 data. So I would encourage people to look at the analysis that you've provided. I think at the highest level, obviously, the study needs to be positive. It needs to be statistically significant, which will put us in a position to file a new drug application later this year. Obviously, every study is a little bit different. We have already commented that the patient population in Phase III looks very similar to Phase II and the open-label extension rollover rate in Phase III is very similar to Phase II. So that gives us a lot of confidence going into it. And I think I also always want to remind people that the X-TOLE study will be on label, right? That study has already been complete with the best placebo-adjusted efficacy ever seen in a focal onset seizure study. And so this is really a study that will add to that and be part of the new drug application. Chris?

I think you covered it.

Okay. Darren, do you want to provide just your perspective on the overall profile?

Yes. I think with -- when you think of the X-TOLE data, it really has set the precedent. And when you think about the prescribing epileptologists, general neurologist, the novel mechanism of AZK is really going to be transformative in there. It's just not another sodium channel blocker. And so commercially, we already know based on our market research, our discussions most recently at AES, there's a tremendous amount of excitement for, as Ian outlined, the attributes of azetukalner and particularly with the general neurologist, they view this as a really easy therapy to incorporate into their practice. And so I think with the backdrop of the clinical data, the safety and tolerability, we're pretty excited to get this to physicians and their patients.

Okay. And I did get this question this morning. I thought it was kind of a good one. Have there been any protocol amendments to X-TOLE2 or X-TOLE3?

Chris?

Yes, there have been some amendments, but nothing that has -- I mean to Ian's point, basically, the spirit of X-TOLE2 was to maintain consistency with X-TOLE. And so if you look at the major sort of inclusion and exclusion criteria, you look at the baseline characteristics, you look at the geographical spread, specifically percentage of patients from the U.S., we're seeing a great deal of consistency. So there isn't anything within any of the differences between those protocols that we think are substantive and would drive a difference in efficacy.

With all that in mind, what keeps you up at night on this study?

I can start and then Chris can add. Look, every clinical trial, we're enrolling a large number of patients dispersed throughout a number of clinical sites. But I think what gives us great confidence is we have the most experience of running epilepsy studies over the last decade. And so I think both internally in our team, we have epileptologists and psychiatrists that work at Xenon that have a huge amount of experience. We've run the largest study ever run in FOS that's been unblinded. So I think we have tremendous confidence. So I wouldn't say that there's anything that we're really concerned about as we think about the epilepsy work. Obviously, with psychiatry, where always these studies in terms of execution is critically important as we spend a lot of time working with the sites and making sure that we're getting the right patients into a psychiatry study. So that's something that we spend a lot of time thinking about as well. And then as we think about the early-stage portfolio, it's really the excitement of where we could take this. I think if we have a novel analgesic and non-opioid mechanism with the profile of our NaV1.7 program, I mean, the opportunity to have an oral non-opioid chronic pain drug is incredible. And so there's a lot of excitement and thinking internally about how do we develop that in the most efficient way. Chris?

Yes. I mean I think we're in as good a shape as we possibly could be for all the reasons that Ian and I have mentioned so far. So I'm sleeping well.

Okay. And as -- maybe this is a zoom ahead question here, so beg my pardon. But what -- how do you -- how should we think about the marketing message here? And is there any kind of key differences that you expect there could be between epileptologists and general neurologists?

Yes. Traditionally, with antiseizure medications, typically, the epileptologists are the early adopters, which is not surprising, right? Everybody -- every patient they see in their practice every day are patients with seizures and typically refractory seizures, right? So they're getting referred into the epileptologists because of the severity of their disease. And then the general neurology community, they are typically a more late adopter. And remember, when we are approved and launched, it will be an 8-year gap between the last time a branded ASM was approved. And so there's been this kind of period of really nothing new for the general neurologist. And so from the last branded medication that was approved, the general neurologists are really finding that medication difficult because of the ability to have to titrate both up with the medication and down on other ASMs and other issues. Again, back to my earlier comment, I think with azetukalner, it's very clear that the ease of use, and then you're talking about kind of what will make a difference here. And I think because of the daily dosing, the novel mechanism, no drug-drug interactions, titrated dose right out of the gate, tremendously excited to bring this to the general neurologist. So they're able to incorporate this into the patients that they're currently managing, keep getting them to get seizure control, potentially seizure freedom and not have to refer and be able to manage that. And again, all our market research suggests that this is the perfect medication for them to do that. And so I think the messaging for us is going to be around the attributes that we're able to really see in X-TOLE and what we anticipate in X-TOLE2.

And any other learnings on like what the keys to success are for a branded epilepsy launch and what Xenon may be doing differently or similarly to others?

Yes, there are several. I think -- as I think about commercial success, there are a few different areas. One is it's all centers on the data, right? So we feel confident there. And then it's about how do you think about patient identification, the treating physicians and really think about that those epileptologists, the general neurologists and also the advanced practice -- APPs that are in the community that are more and more getting involved in patient management. So we look at where do we think about taking the AZK message depending on where the patients are. So that's the key. And then those key messages and what have you. But then there's other key stakeholders involved. Obviously, the payer, that landscape is -- can't underestimate how important that is. And again, I think the ability for us, which we'll start executing on post data late this year, is that engagement with payers, right? Again, that kind of gap between the last launch to be able to bring them up to speed on the current practice of treating epilepsy patients, seizure patients and really understanding and letting them understand the still what is a tremendous unmet medical need. And so making sure that upon launch that it's -- we could have as quick an uptake as possible. The other component is that patient experience, I think, is critical to a successful launch. How do you set up your distribution, your patient support, all those services that really make what I say, you want that patient to have that outstanding experience early on. All those things hinge around the last thing that I think is absolutely critical is the team that you built, right? And I think that when I think of the commercial team that we're starting to build, really a lot of deep, deep epilepsy experience, both across all facets, sales, marketing and on the payer side. And then I believe one thing about epilepsy, and it's -- a lot of people, if you think about sales representatives, people in the field, MSLs, they commit their careers to epilepsy. And so I think we'll be able to attract the top talent that will want to come with this new medication, with the impressive efficacy, the opportunity to bring something new and novel to their customers. And so I think those are the things that I think about that make this a successful launch.

And maybe I could just add on the talent side. Azetukalner based on the profile so far has the opportunity to be a generational asset, right? The profile is different than we have seen in so long in the epilepsy space. And the team to execute is critically important. Darren joining as Chief Commercial Officer involved in the launch of Epidiolex, the most successful epilepsy launch ever. Darren has already added to his team in terms of Head of Market Access, Head of Sales and Marketing, who has probably some of the deepest epilepsy experience over the last 2 decades. And Chris, on the medical side, we've had MSLs in the field for the last 18 months. So we have early invested in building relationships in the epilepsy community for Xenon as a trusted partner and azetukalner as a trusted brand. And I think our data disclosure and our relationships and information and scientific sharing with the community has been incredibly well received. We had over 50 employees at the American Epilepsy Society meeting, and there's a real buzz around Xenon in the epilepsy community.

Well said.

Tess, will you indulge me with one thing? So just real quick. Ian talked a lot about how well patients are doing in our open-label extension study in epilepsy. It's really quite impressive. If you take a look at how they're doing compared to the double-blind period, over 90% of them had a 50% reduction in seizures. A lot of the data we show starts at the baseline of the open label. So if one were to compare the Phase III open-label studies and one comparison you were looking at the beginning of the double-blind and the other you were looking at the beginning of the open label, it would be a comparison that would be tough to make. So I just want to point that out. Thanks.

Thinking through the expansion potential of azetukalner here, how does the next 3 to 5 years look for Xenon if you are successful in both epilepsy and neuropsych versus just epilepsy?

Sure. Darren, do you want to talk about kind of the launch first in epilepsy and then as we'd expand. And actually, maybe even before that, Chris, one of the things that we haven't talked about today that I think is important is maybe talking about the comorbidities in epilepsy as well and that we're looking at endpoints of depression and anxiety in our epilepsy studies. That's probably a nice segue to psychiatry.

Sure. So we haven't shared the baseline characteristics of X-TOLE2 just yet, but we're expecting them to be quite similar to X-TOLE. And depression, anxiety, migraine, headaches are all very common comorbidities. And so we're expecting to be able to gather that data in the ongoing Phase III program.

Yes. I think, obviously, epilepsies, the focal seizure launch is the initial focus. But if we were so fortunate to have great data in MDD, that's a tremendous opportunity, and we would pivot to building out that Psychiatry business. And again, Ian pointed it out today, tremendous unmet need, a lot of patients that suffer with MDD that could be [ helped ] by the novel mechanism, the rapid onset and really, really favorable safety profile. So yes, tremendous that would be a nice outcome.

And just last question for me here is just on formulation. Are you exploring any other formulations of azetukalner?

Are you specifically thinking about intravenous? Yes, yes. So often in epilepsy, we think about kind of 2 parts of life cycle management. One is on the pediatric side and one is on the IV side. So yes, all of that work is ongoing. We have agreed upon pediatric development plans with FDA as well as with EMA. So over time, we will get into younger and younger patients. Obviously, adolescents can take a pill. But as you get into younger patients, you need a specific pediatric formulation. So a lot of that work has already taken place, and we'll get into younger patients over time. The other thing often that the epilepsy community is asking for is whether you have an IV formulation. So as patients come into the hospital that they may start on an IV formulation and then they leave the hospital with an oral formulation. So that work is ongoing as well.

Great. Thank you.

Thank you.

Thanks, Tess. Thanks.