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

Ladies and gentlemen, thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2026 Xenon Pharmaceuticals, Inc. Earnings Conference Call. I'd like to remind everyone that this call is being recorded. [Operator Instructions] I would now like to turn the call over to Ms. Colleen Alabiso, Senior Vice President of Corporate Affairs at Xenon Pharmaceuticals, Inc. You may begin.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's second quarter 2026 Financial and Operating Results. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer. After completing our prepared remarks today, we will open the call up for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans in current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates, the strength of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, including the anticipated filing of INDs or equivalent and NDAs. The timing and results of those filings and our interactions with regulators, our ability to successfully obtain regulatory approvals, anticipated timing of top line data readouts for our clinical trials of Azetukalner and other candidates and our expectation that we will have sufficient cash to fund operations into 2029. Today's press release summarizing Xenon's second quarter financial results and the quarterly report on Form 10-Q will be made available under the Investors section of our website at xenon-pharma.com and filed with the SEC and SEDAR+. I'll now turn the call over to Ian.

Thanks, Colleen, and good afternoon to everyone joining us today. We are excited to recap another productive quarter for Xenon as we work toward our goal of becoming a fully integrated neuroscience company, delivering life-changing medicines to patients. In the second quarter, we remain focused on three key areas: First, preparing our new drug application for Azetukalner or AZK for focal seizures as well as sharing our exciting Phase 3 X-TOLE2 results with healthcare providers and preparing our go-to-market strategy. Second, advancing five additional Phase 3 studies of AZK in epilepsy and neuropsychiatry indications, which may help significantly expand the addressable patient population. And third, advancing and expanding our pain programs, including the Phase 1 studies of XEN1120 targeting Kv7 and XEN1701 targeting Nav1.7 as well as initiating clinical development of an additional Nav1.7 molecule, XEN1720, demonstrating our belief in and the importance of this target. I'll provide a bit more detail of our recent achievements before passing the call over to Chris, Darren and Tucker. First, we are making great progress towards submitting our NDA for AZK and preparing for launch. I'm happy to share that we've completed a successful pre-NDA meeting with the Food and Drug Administration, and we're on track for a submission later this quarter. We have continued to share our X-TOLE2 data with HCPs, including two important meetings for the epilepsy community. First, at the American Academy of Neurology meeting in April, where many of you will recall that the X-TOLE2 results were featured as a late-breaking science abstract and podium presentation. Then in June, we had another opportunity to present the top line X-TOLE2 results at the Epilepsy Foundation Pipeline Conference. This is attended by HCPs, researchers, industry and patient advocates. Beyond these congresses, our MSLs have been out in the community responding to HCP requests to learn more about our data. Overall, we continue to hear very positive feedback and excitement for both the X-TOLE2 results including the best placebo-adjusted efficacy in FOS to our knowledge and AZK's differentiated profile, including a novel mechanism of action, rapid onset of effect, once-daily dosing with no titration and no need for dose adjustments with other ASMs. We feel increasingly confident in AZK's potential to become a preferred add-on therapy for the significant number of patients who do not achieve seizure freedom with initial treatment. Darren will share a bit more on the excitement from the epilepsy community later in the call as well as the progress we continue to make on preparing for the launch of AZK. We also continue to focus on expanding the opportunity for Azetukalner, including through the X-TOLE3 study in FOS to support potential regulatory submissions outside the U.S. as well as the X-ACKT study in primary generalized tonic-clonic seizures to support regulatory submissions for an additional epilepsy indication. Through our ongoing Phase 3 X-NOVA2, X-NOVA3 and X-CEED studies, we continue to advance our work to broaden Azetukalner's opportunity to neuropsychiatry. There is strong rationale for Kv7 openers in major depressive disorder and bipolar depression, and AZK could deliver a novel mechanism where innovative treatments are urgently needed, especially treatments that may also impact anhedonia and that could offer differentiated tolerability profiles as well as rapid onset of action. We continue to expect our first Phase 3 MDD study results in the first half of 2027, and we will narrow that guidance as we get closer to the top line readout. Additionally, we're excited about the progress of our early clinical pipeline for pain. We are nearing completion of our Phase 1 studies for both XEN1701 and XEN1120, and data generated to date supports the initiation of Phase 2 proof-of-concept studies in acute pain for both programs. We have also recently advanced a second Nav1.7 candidate for pain into a Phase 1 clinical trial. So, this will give us multiple shots on goal for this important pain target. Success in any one of these three novel non-opioid pain programs would meaningfully increase value for Xenon and our opportunity to impact the lives of millions who live with chronic or acute pain. In line with our continued commitment to epilepsy, we also continue to invest in multiple high-quality candidates targeting various ion channels. This includes our preclinical Nav1.1 program for Dravet syndrome, where we are in IND-enabling studies with the intent of putting the best candidate into the clinic. It also includes our partnered program with Neurocrine, NBI-921355, an investigational selective inhibitor of Nav1.2 and Nav1.6 in development for the potential treatment of certain types of epilepsy, which continues to advance through a Phase 1b study with data expected in 2027. So, with that, now I'll turn over the call to Chris, who will provide additional clinical and regulatory updates. Chris?

All right. Thanks, a lot. It continues to be a very exciting time here at Xenon as we prepare the NDA for Azetukalner and share our data with the community through scientific exchange opportunities. The interactions our team has had at recent meetings as well as out in the field have been incredibly affirming of our belief in AZK's potential to meaningfully impact the FOS treatment paradigm and provide a therapeutic option with appeal to epilepsy specialists, general neurologists and advanced practice providers alike. As Ian mentioned, we have completed a productive and positive in-person pre-NDA meeting with FDA, where we gained alignment with the agency on components of the NDA package. We, therefore, remain on track to submit our NDA this quarter as planned and are encouraged by our continued engagement with the agency. Completing the NDA submission is our team's top priority, and I'm very pleased with our progress and look forward to updating you in the coming months. We also continue our focus on presenting and educating on our exceptional X-TOLE2 data and recently presented at two important conferences for the epilepsy community. First is a late-breaking science abstract and platform presentation at the AAN meeting in Chicago and second, at the EF Pipeline Conference in Leesburg, Virginia. In these presentations, we highlighted the following key points from our X-TOLE2 data. One, with regards to efficacy, the study met its primary endpoint and demonstrated what we continue to believe is the best placebo-adjusted response of any pivotal focal seizure study, which was highly significant and outperformed our Phase 2b X-TOLE study. This is even more meaningful when you consider the level of treatment resistance in the X-TOLE2 study population, which had failed a median of five prior antiseizure medications and 60% of those patients were on or had already tried and stopped cenobamate. Second, we also observed early dose-dependent MPC reductions in weekly FOS from baseline to week 1, reinforcing AZK's rapid and sustained antiseizure activity. Third, we observed dose-dependent increases in the proportion of patients with at least 75%, 90% and 100% reductions in monthly seizure frequency through the double-blind period as well as evidence of efficacy building over time as evidenced by improvements in the 100% responder rate in the last 8, 6 and 4 weeks of the study. Fourth, with regards to safety, AZK continued to demonstrate a generally well-tolerated profile, which was consistent with the X-TOLE study. The most common treatment-emergent adverse events across both studies in the AZK dose groups were dizziness, somnolence, headache and fatigue. With more than 800 patient years of safety and exposure data, we're comfortable that this profile is consistent with other well-tolerated antiseizure medications and with a drug that is potent and active in the central nervous system. We also had a tremendous opportunity to interact with general neurologists at AAN, where we highlighted our 48-month X-TOLE open-label extension data, demonstrating a 91% reduction in monthly seizure frequency for those treated for at least 48 months. In the same group, almost 40% were seizure-free for at least 12 months and one in four were seizure-free for at least two years. This is truly remarkable considering the level of treatment resistance in seizure frequency in the overall patient population at baseline. Now as we look ahead, we're excited to continue to share the AZK data at the 16th European Epilepsy Congress, or EEC, taking place between September 5 and 9 in Athens, Greece and at the Annual American Epilepsy Society or AES meeting taking place December 4 through 8 in Denver. With regards to EEC, our X-TOLE2 top line results are among the six abstracts accepted and planned for presentation. Also accepted is a new abstract that will highlight the mechanistic characterization of Azetukalner, including Kv7 binding, enhanced channel opening and rational polytherapy potential. In this presentation, we plan to share in vivo data demonstrating the potential additive effects of Azetukalner when used in combination with commonly prescribed antiseizure medications, reinforcing its opportunity to enhance seizure control through the application of rational polytherapy in clinical practice. Looking ahead, we're planning to have a significant Xenon presence at AES in December and multiple new AZK data presentations, including additional data from the X-TOLE2 study and continued follow-up from the X-TOLE open-label extension study. Moving on to neuropsychiatry. We continue to enroll patients in our three ongoing Phase 3 studies of AZK for Major Depressive Disorder or MDD and Bipolar Depression or BPD. Depression remains an area where the differentiated profile of AZK, including its novel mechanism of action, rapid onset of action and potential benefits on anhedonia could meaningfully benefit patients in a second category with a much larger patient population who continue to have unmet medical needs. There's a strong rationale for Kv7 openers in MDD and BPD. Several preclinical and clinical studies, including our own X-NOVA study have shown promising signals of antidepressive effects for the Kv7 mechanism. Additionally, in BPD, specifically, there are genetic links with Kv7, including evidence of Kv7 downregulation. AZK would deliver a novel mechanism to the MDD and BPD treatment paradigms where innovative treatments are urgently needed, especially those that may also impact anhedonia and that have the potential to offer differentiated tolerability profiles and rapid onset of action. Our clinical team has made great progress with X-NOVA2 and X-NOVA3 in MDD and X-CEED in BPD. Enrollment remains on track, and we anticipate sharing top line data from X-NOVA2 in the first half of 2027. Turning now to our pain portfolio. There remains a critical unmet need for non-opioid therapies given the limited efficacy of current options and substantial risk of abuse independency tied to opioids. At Xenon, we have more than 20 years of experience, both through collaborations and our own discovery research on novel pain targets, most notably the sodium channel, Nav1.7, which we view as the best genetically validated pain target. There's striking genetic data in patients with loss of function mutations that have no ability to feel pain and gain of function mutations have also been identified that drive pain disorders, further underscoring the critical role Nav1.7 plays in pain signaling. Our Phase 1 study of XEN1701, which targets Nav1.7 continues to advance. Consistent with what we shared earlier this year, we've seen exposures in both the single and multiple ascending dose portions of the study that are predictive of efficacy. Recall that nociceptive sensory neurons have processes that extend into peripheral tissue as well as behind the blood-brain barrier, such that channels are expressed in both peripheral and central compartments. Central Nav1.7 target engagement is therefore core to our therapeutic hypothesis. And in this Phase 1 study, we have confirmed central drug exposure via cerebrospinal fluid collection in healthy volunteers. Based on this, we believe we are achieving both peripheral and central receptor occupancies that exceed what is needed for efficacy based on our modeling and on human genetic data. We're looking forward to completing the Phase 1 study this year. In addition to advancing XEN1701, we've continued our discovery around Nav1.7 given our deep experience with the target and strong belief in its therapeutic potential. We've been working on several preclinical Nav1.7 compounds, continuing to refine our understanding of the biology and to develop novel chemistries. We're pleased to announce that we recently received CTA approval of XEN1720, which also targets Nav1.7 and have initiated a Phase 1 SAD/MAD study. XEN1720 provides us with an additional clinical candidate that further strengthens our leading position in Nav1.7, an important pain target with compelling genetic validation. Beyond Nav1.7, our Phase 1 SAD/MAD study of XEN1120, which targets Kv7 also continues to advance. Kv7 modulates neuronal hyperexcitability at multiple points along the pain pathway, and we believe Kv7 potentiators have the potential to treat a range of pain conditions. This is supported by high levels of Kv7 expression throughout the pain pathway and our preclinical data shows that Kv7 is enriched in the C- and A-delta pain subtypes of sensory neurons. In addition, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain and evidence supports that dysfunction or downregulation of Kv7 activity has been observed in altered pain states. We've been pleased to see drug concentrations in both the single and multiple ascending dose portions of the study that are consistent with pain reduction in preclinical models. Like Nav1.7, exposure in both the peripheral and central nervous system is likely critical to success for a Kv7 opener in pain, and data so far support that we are achieving Kv7 target engagement in both compartments. We look forward to completing the Phase 1 study this year and continuing to lead on Kv7 science and its application to pain in addition to epilepsy and depression. With that, I'll turn it over to Darren to provide an update on our path to commercialization.

Thank you, Chris, and good afternoon, everyone. We're making strong progress as we prepare for a potential launch of AZK, our first commercial product and bring an important new treatment option to patients living with focal seizures. During the second quarter, we continued to execute our commercial build-out, adding key leaders across marketing, sales and field strategy and commercial operations. We've assembled an exceptional team that brings decades of epilepsy experience and successful launch execution. Their expertise, combined with a strong belief in AZK's potential, gives us confidence that we are building the capabilities needed to realize the significant commercial and patient impact opportunity ahead for AZK. Additionally, we continue to advance our launch readiness and refine our launch strategy informed by deep insights into the treatment landscape, prescribing dynamics and the healthcare professionals we expect to serve in both primary research and in advisory discussions with general neurologists, epilepsy specialists and advanced practice providers, we consistently hear strong enthusiasm for AZK and the recognition of the unmet needs that AZK would address, including compelling efficacy, a well-understood safety profile, rapid onset of action and ease-of-use attributes, all of which could make AZK a go-to add-on therapy. While we expect epilepsy specialists to lead early adoption of AZK, our market research supports the view that general neurologists can move to AZK sooner than historically has been the case for newly launched epilepsy therapies. To support these efforts, we continue to refine and validate our brand positioning, sharpen our key points of differentiation and develop tailored engagement strategies designed to resonate with specific customer segments. We also are increasingly focused on introducing payers to Xenon and communicating the potential value proposition of AZK through the lens of the unmet medical need. We've engaged with payers through several key conferences this year, helping to refine our market access strategy and strengthen our overall launch readiness. We also have started to build out our payer-facing field team with the expectation to fill all roles by the end of the year and deploy them in the field early next year. An important component of the AZK launch will be our distribution approach, and we continue to work to identify, engage our channel partners on the distribution and access side. We also continue to build awareness of Xenon as an emerging leader and committed partner to the epilepsy community between our customer engagement, MSL and patient advocacy teams as well as our presence at congresses, regional meetings, community events, we're making new connections, raising awareness of Xenon and the AZK data we've generated and deepening our relationship each day. As we move forward, I look forward to sharing more details on our go-to-market strategy and how we plan to bring innovation to the epilepsy landscape with a best-in-class antiseizure medication, enhanced channel and patient services and a strong value proposition for payers. We believe the strategy, capabilities and team we are assembling position us well for a successful launch, pending FDA approval and ultimately, the opportunity to improve outcomes for patients living with epilepsy. With that, I'll now turn the call over to Tucker to review our financial results and upcoming milestones. Tucker?

Thanks, Darren, and good afternoon, everyone. We ended Q2 with cash, cash equivalents and marketable securities of $1.2 billion, which, based on our current operating plans, provides cash to fund operations into 2029. Given our strong balance sheet, we are well positioned to support AZK's U.S. launch, multiple AZK registrational programs, the continued maturation of our pain pipeline and the advancement of other early-stage research and development programs. I would refer you to our press release and our 10-Q filed today for further details on our financial results. Overall, it's a very exciting time at Xenon as we continue to build momentum toward our first commercial launch and across our promising pipeline. As we head into the back half of the year, we remain focused on our upcoming NDA submission expected this quarter as well as the advancement of our commercial readiness activities to support a strong launch in FOS. We are also working to broaden the therapeutic opportunities for AZK beyond epilepsy, and we continue to make progress enrolling our studies in MDD and BPD. We look forward to the readout of our X-NOVA2 study in MDD anticipated in the first half of 2027. And lastly, we're excited about the progress we're making in pain with two Phase 1 studies for XEN1701 and XEN1120 approaching completion and now one additional Phase 1 study for XEN1720 underway and believe Xenon is well positioned to become a scientific leader in the development of novel non-opioid pain therapeutics. We remain very optimistic about the opportunity ahead as we transition to a fully integrated commercial stage company. And with that, we can open the call for questions. Operator?

[Operator Instructions] And your first question comes from the line of Paul Matteis with Stifel.

One quick one on AZK and one on pain. On AZK, maybe just recap for us this FDA pre-NDA meeting and if anything notable came out of it? And then second, on the pain program, maybe talk a little bit about the safety profile you've seen so far. Have you seen any cardiac AEs or anything noteworthy that has been dose-limiting for prior Nav1.7, not Kv7. And then just for Nav1.7, what's the rationale behind advancing a second product now?

Thanks, Paul. Chris, do you want to take the, maybe a little bit of color and commentary on the pre-NDA meeting, and then I'm happy to answer the pain questions.

Sure. Happy to do so, Ian. Thanks for the question, Paul. So we've had the pre-NDA meeting, as mentioned in the prepared remarks, it was an in-person meeting. It was very productive. We continue to appreciate the collaborative nature of the interactions with FDA. We covered the main questions that we wanted to cover with FDA as it pertains to the submission. We continue to believe that we have a very strong package and that overall, it's a pretty straightforward package that we're bringing to the agency. So we're in good shape at this point in time. We're on target to submit this quarter.

Thanks, Chris. And then, Paul, I think I've got all your pain questions down here, but if I miss one, just jump back in. So, as we think about, and your questions were related to Nav1.7, let's just focus on that target for a second. We had said earlier this year that based on some of the SAD data, we already thought that we were getting or we had profiled that we were getting up to enough exposures that we would see based on our predictions kind of that level of receptor occupancy that should show an analgesic effect. I would say we have even more confidence today because we're really nearing the completion of the study. So, we've gone through multiple SAD and MAD cohorts. And again, all of our modeling predicts that we're going to have enough exposure to have the receptor occupancy that is being taught by human genetics. So I think we feel like we're in a really good spot from the XEN1701 profile. There was a new piece of information that Chris disclosed today that I just don't want to miss, which is we've looked at CSF as well. So our hypothesis is that we want to get exposure both in the peripheral nervous system as well as the central nervous system. We can kind of model that based on our animal work and kind of predict what it's going to be in humans, but we did take extra cohorts just to actually do CSF and to make sure that we were getting central exposure. So I think that's another box that we've checked that, again, feel comfortable that we're getting this global receptor occupancy of the target. We haven't finished yet. So I'm not going to go into specific safety data. You asked around the cardiovascular effect. Again, today, what we see in the data is that it's a profile that we're very comfortable moving ahead into a Phase 2 proof-of-concept study. So that's taking everything into consideration. So I'm not going to go into very specific details, but we feel very comfortable on what we've seen so far, getting close to completion. [Technical Difficulty] Yes. Yes. Once we're complete, then I think we have an opportunity to just give you a little bit more information when we have all of the data unblinded and we can see both the placebo and the active groups. I think your last one was just around XEN1720 kind of the next molecule. Is that right? Yes. I don't know if you dropped off, Paul. But yes, I think you had a question just around 1720. So we have taken a second molecule into Phase 1 clinical development. When we think about the Nav1.7 program, and if you go back to the webinar we did almost a year ago, we've made a number of advancements that have overcome some of the limitations we've seen historically. So those were around selectivity and potency, around protein binding and around the kind of this PK or biodistribution and exposure both in the periphery as well as in the central nervous system. So when we look at 1720, it has some different analysis of those components that we're looking for when we compare it to 1701 and a differentiated chemistry profile. So I think that this is such a high-value target. We're going to continue to do preclinical work. We're going to continue to advance novel chemistries and move multiple molecules into the clinic just to get more opportunities to see what's the best molecule at the end of the day. Nothing changes with the lead molecule 1701. This is really just around a second molecule that has somewhat of a differentiated profile.

Your next question comes from the line of Tessa Romero with JPMorgan.

Ian, Chris, can you maybe talk a little bit about how you are thinking about what you would still like to get out into the public domain about the profile of Azetukalner in your Phase 3 X-TOLE2 trial and what the specific publication strategy looks like? I know there's a small epilepsy conference at the end of the year, but any other color you'd give us?

Thanks, Tessa. I'm happy to start, and Chris, you can add. So I think we've given a fair bit of information on X-TOLE2 already. So you've seen top line data. You've seen all of the key efficacy endpoints, including some that were outside of the statistical hierarchy. And you've seen kind of the broad safety profile. So we were able to show those data at AAN at the EF pipeline. We're going to have more data in Encore at EEC and then more, as you mentioned, at AES. If we look back to the X-TOLE data, we looked at certain different analyses that we're still going through, different seizure subtypes, different types of patients. So all of that work kind of ongoing, and you'll see that over time. The publication strategy is critical. So we have peer-reviewed publication of the X-TOLE and X-TOLE OLE data, and we are working hard to get the peer review of the X-TOLE2 data as well because we think that's really going to be important for the epilepsy community that we not only presented at congresses, but it's also peer reviewed. Chris, anything to add on kind of details on some of the other analyses you're looking at?

In the prepared remarks, we had talked about the fact that 60% of patients in X-TOLE2 were either on or had failed cenobamate. And so you may see data on that down the road.

Your next question comes from the line of Andrew Tsai with Jefferies.

Congrats on the progress this quarter. This is Matthew Barcus on for Andrew Tai. Now you provided more color today on the progress of your Phase 1 SAD/MAD studies in pain. Can you just remind us like what additional data you plan on sharing later this year for those programs? And then at that time, will you be prepared to delineate which acute pain indications you'll be pursuing next for these studies as well? And then our understanding is that X-CEED started maybe 6 to 8 months after X-NOVA2. And with X-NOVA2 data in the first half of next year, how should we be thinking about the interim look from X-CEED, if you have any color on the timing for that?

Sure. I think Matt, I got them all. I'm happy to kind of walk through time lines and the pain stuff. Tucker, do you want to do the X-NOVA timelines? And then I'll, why don't I jump in on the data from the pain programs and the types of acute pain PoC studies?

Sure. So we've said on the call in the press release is that we'll have the X-NOVA2 data in the first half of next year. We haven't provided any guidance yet on either X-NOVA3, right, the second Phase 3 study in MDD. And I think you asked about the X-CEED study in bipolar depression. And again, as you said, both of those started after X-NOVA2, but we're still not far enough along in the enrollment curve to provide an updated time line for when those might read out, but they'll certainly be after, obviously, the first half readout for the MPD study, X-NOVA2.

And then on the pain stuff, yes. As I mentioned in the first question, we're getting close to completion of those Phase 1 studies, then we'll have the complete data package and then we can really talk about what we provide publicly. These are competitive targets. And so I think we may be balanced in terms of how much information we provide publicly. But I think we'll be able to at least walk you through kind of our decision process on why we believe we have enough exposure and the appropriate safety profile to move into a proof-of-concept study. The proof-of-concept studies are still being designed right now for both XEN1120, the Kv7 drug as well as 1701, the Nav1.7 drug, but these will be acute proof-of-concept studies, so things like a bunionectomy or an abdominoplasty study. We'll have the final trial designs for those in the coming months. And I think part of that rollout, we'll be able to talk about the specific indication in the acute pain proof of concept, but importantly, the trial design as well.

Your next question comes from the line of Brian Skorney with Baird.

My question is on the anticipated Phase 2 proof of concept in acute pain. How are you thinking about design right now? If we look at the path Vertex, they went head-to-head with low-dose oxycodone and placebo, but restricted rescue to ibuprofen, the TiVo program which was published the other week. We also went against low-dose oxycodone and placebo, but allowed use as Percocet as rescue and maybe because of Percocet's efficacy showed a pretty disparate result. Do you see any better value in one versus the other design in terms of using an opioid as a rescue? Or are you thinking about something completely different?

Thanks, Brian. I'm happy to start and then, Chris, if you've got anything to add. So Brian, we're not quite there yet, as I just kind of answered on the last question. I know you've been thinking about this a lot and you and I have had conversations about just the right design for a Phase 2 proof of concept. I'll take it a step further. You're looking at both what active comparators as well as kind of rescue. We also have to think just about how many active dose arms of the experimental medicine as we kind of really understand dose range finding and identifying doses to move forward in the future clinical development. So there's a number of things that we kind of want to answer within that Phase 2 proof-of-concept study. We're still in the design phase. I don't think that there's going to be anything in this study that's going to be unusual. So I think it would be reasonably standard. But as you said, a few different sponsors have taken slightly different approaches here. But I think we're only a few months away being able to kind of walk you through what the trial design is and why we've made certain decisions in the trial design. Chris, anything to add right now from your perspective?

I'll just say that we're following the field closely. And of course, the studies that have been done recently will serve as guides for what we do eventually. The advantage of using the opioid as a rescue is that you can show data with opioid sparing. So we're looking at that, but it's still in the works, Brian.

Your next question comes from the line of Joseph Thome with TD Cowen.

On the progress. Maybe first on depression. Can you remind us the powering assumptions on HAM-D for X-NOVA2? And maybe any changes in the baseline depression severity versus the patients that you were enrolling for X-NOVA? And then for AZK, this adoption by general neurologists seems to be a unique exciting opportunity. Can you go into a little bit more detail on when you expect general neurologists to start adopting the therapy and maybe specific education efforts you can do to make sure they have a good initial experience?

Thanks, Joe. Okay. Why don't we do, I'm happy to start just on the powering assumptions. And then, Chris, why don't we broaden that out? I mean, Joe's question is just on the HAM-D entry criteria from Phase 2 to Phase 3, but I think it might be helpful just to walk through a bunch of the changes that we've made from Phase 2 to Phase 3 because I think we learned a lot in the X-NOVA study that we're applying into X-NOVA2. And then Darren, jump in on your thoughts on general neuros and both adoption, but also, I think some of the profile of AZK that is really the feedback you're getting from the general neuro interaction, and I know you've done some ad boards on the general neuro side as well. But Joe, just to kick off on the HAM-D17, so we're appropriately powered for a Phase 3 study. So think about that kind of 90% for about a 2, 2.5 point separation in that range based on our expectation in terms of standard deviation. So I think we have really good powering in the study. It's 450 subjects. X-NOVA2 and X-NOVA3 are the same, meaning they're designed exactly the same as monotherapy studies, but I think well powered to see that separation between active and placebo. Chris, do you want to go through the X-NOVA to X-NOVA2 changes?

Yes, sure. Happy to. So obviously, one of the things that we changed is we're including a larger sample size, so the power is higher. We decreased the number of active treatment arms from two to one, which in general, saves you about one point on the placebo response. So that's favorable. We increased the cutoff a little bit so that we're collecting a little bit more of a slightly more impaired population with more depressive symptoms in Phase 3 relative to Phase 2. We're focusing on adherence by using an app that captures adherence and allows for real-time feedback for subjects who aren't adhering. And then just overall, we're scrutinizing patient randomization even closer in Phase 3 than we were in Phase 2, using the safer criteria and then keeping a real close eye on the data in real time to make sure that there isn't anything unexpected happening. But yes, we don't share baseline characteristics as the study is unfolding. As you know, every patient that's added changes that. So we'll share that once the study is complete.

Yes, Joe, regarding the general neuro, yes, we think it's a pretty exciting opportunity. If you look historically at the most successful antiseizure medications, Kv those were really embraced by the general neurologists. And we spent a lot of time understanding that history, but also then where does Azetukalner fit in with its unique characteristics. And Joe, you know better than anyone. It's a novel mechanism. We have ease of use attributes, really stellar safety and efficacy profile. So we've talked to a lot of general neurologists about this. And as Ian highlighted, through advisory boards and other one-on-ones. And when you couple the efficacy safety along with our open-label extension seizure freedom data, it really is a package that they're really compelled by. I think we have this opportunity to do that. We're doing a lot of work now kind of targeting, understanding where we're going to have our focus at launch. And so as you've noted, kind of how do we expedite that utilization, that's something we're tremendously highly focused on. The other piece of it is also how do you use the expression, make it a good experience for them. I think this is where we're trying to be and thinking about really being a little bit disruptive or innovative here because I think traditional antiseizure medication launches have gone a certain distribution route, have not really assisted the general neurologists in different things like prior authorization and helping patients get through obtaining the therapy. And also on the patient side, where they may show up at a retail pharmacy, for example, and really struggle there. So we're really evaluating a service that we can wrap around both the general neurologists and the patient to make that experience a good one out of the gate. We think that based on our research and discussions, those have been some of the barriers that they've encountered and that we hope to overcome. And so again, we still have a lot of work to do and over the next several quarters, but I think that we're in a really good position to really bend the curve if we can with the general neurologists.