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Xenon Pharmaceuticals Inc. (XENE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $7.5M (Neurocrine collaboration milestone), a significant beat versus Wall Street consensus of $1.9M; diluted EPS was -$0.83, modestly better than consensus of -$0.90. Bold beat: Revenue and EPS both beat Street in the quarter.*
  • Guidance updated: X-TOLE2 Phase 3 FOS topline shifted to early 2026 from prior H2 2025; patient recruitment expected to complete in “next few months,” reflecting a modest delay but nearing the finish line. Bold change: topline timing moved to early 2026.
  • Operating spend increased: R&D $61.2M (+$17.0M YoY), G&A $19.0M (+$4.2M YoY); net loss widened to $65.0M (vs $47.9M YoY) on higher R&D and lower interest income.
  • Balance sheet remains strong: cash, cash equivalents and marketable securities at $691.1M; runway guided “into 2027,” supporting multiple registrational programs (epilepsy, MDD, BPD) and first-in-human pain programs.
  • Call catalyst: management affirmed ~6 months from topline to NDA filing if positive, with CMC/nonclinical sections already in good shape, framing an actionable regulatory timeline for investors.

What Went Well and What Went Wrong

What Went Well

  • Clear R&D progress across late-stage and early-stage pipelines, including ongoing Phase 3 epilepsy (X-TOLE2/3, X-ACKT), active Phase 3 MDD (X-NOVA2; X-NOVA3 mid-year), and planned Phase 3 BPD initiation mid-year; early-stage Kv7 (XEN1120) Phase 1 initiated and Nav1.7 (XEN1701) Phase 1 planned for Q3. “It’s an incredibly exciting time for Xenon...” — Ian Mortimer.
  • Mount Sinai investigator-sponsored MDD study showed consistent drug activity versus placebo on MADRS and SHAPS at all time points, affirming Phase 2 X‑NOVA signals; week-6 deltas >4 points (MADRS) and >3 points (SHAPS) underscore potential antidepressant and anti-hedonic effects.
  • Strong balance sheet and forecasted runway into 2027 despite elevated spend, enabling late-stage execution and pre-commercial groundwork.

What Went Wrong

  • Timeline slippage: FOS topline readout moved from H2 2025 to early 2026; management framed this as modest and attributed variability in large multi-site epilepsy enrollment.
  • Higher OpEx and lower interest income weighed on results: R&D +$17.0M YoY to $61.2M, G&A +$4.2M YoY to $19.0M; other income fell to $8.1M (from $11.5M YoY), expanding net loss to $65.0M (from $47.9M YoY).
  • MDD IST primary neuroimaging endpoint (fMRI) was negative; while not gating Phase 3 plans, it highlights risk around academic surrogate endpoints versus clinical scales.

Financial Results

Quarterly P&L and Cash (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)n/a (not disclosed) n/a (not disclosed) $7.5
R&D Expense ($USD Millions)$57.0 $59.5 $61.2
G&A Expense ($USD Millions)$16.7 $18.0 $19.0
Other Income ($USD Millions)$10.6 $7.9 $8.1
Net Loss ($USD Millions)$(62.8) $(65.7) $(65.0)
Diluted EPS ($USD)$(0.81) $(0.84) $(0.83)
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$803.3 $754.4 $691.1

Notes:

  • YOY comps (Q1 2025 vs Q1 2024): Revenue $7.5M vs $0; R&D $61.2M vs $44.3M; G&A $19.0M vs $14.8M; Other income $8.1M vs $11.5M; Net loss $65.0M vs $47.9M; per press release.
  • Street vs Actual (Q1 2025): see Estimates table below.

Street Consensus vs Actual (Q1 2025)

MetricConsensusActualSurprise
Revenue ($USD Millions)$1.91*$7.50 Beat
Diluted EPS ($USD)$(0.90)*$(0.83) Beat
EPS # of Estimates13*——
Revenue # of Estimates16*——

Values marked with * retrieved from S&P Global.

KPIs (operational)

KPIQ3 2024Q4 2024Q1 2025Notes
Cash runway—“into 2027” “into 2027” Maintained
X‑TOLE OLE seizure freedom (≥12 months)~1 in 4 at ≥24 months (prior update) ~1 in 3 at ≥36 months Reinforced at AAN Long-term efficacy narrative
Patient recruitment (X‑TOLE2)Advancing Advancing “complete in next few months” Near finish line

Segment breakdown: not applicable (pre-commercial; revenue milestone from collaboration).

Margins: not meaningful given limited revenue; gross margin not disclosed.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
X‑TOLE2 FOS toplineFOS Phase 3H2 2025 Early 2026 Lowered (timing slipped)
X‑TOLE2 recruitmentNear-termAdvancing “Complete in next few months” Narrowed (more specific)
MDD Phase 3 (X‑NOVA3)InitiationMid-year 2025 Mid-year 2025 on track Maintained
BPD Phase 3InitiationMid-year 2025 Mid-year 2025 on track Maintained
Cash runwayMulti-yearInto 2027 Into 2027 Maintained
NDA timeline (if positive)Post-topline—~6 months to filing (clinical on critical path) New clarity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Epilepsy Phase 3 (X‑TOLE2/3)Emphasized best placebo‑adjusted efficacy from X‑TOLE; OLE durability; FOS topline H2’25 FOS topline H2’25; AES data to showcase 36‑month OLE Recruitment to complete in months; topline early 2026; high confidence; metrics consistent with X‑TOLE Nearing enrollment completion; timing slipped
NDA timeline——~6 months filing window post-topline; CMC/nonclinical progressing New specificity
MDD program (X‑NOVA2/3)Phase 3 launch by year‑end; prescriber interest in anhedonia/rapid onset/tolerability X‑NOVA2 enrolling; X‑NOVA3 mid‑year X‑NOVA2 enrolling; X‑NOVA3 mid‑year; IST shows clinical scale activity Advancing; external validation on scales
BPD programConsidering expansion; rationale from genetic/Kv7 downregulation Registrational BPD program planned mid‑year initiation First Phase 3 in BPD on track mid‑year; considering stratification I vs II Formalized; design nuance emerging
Early-stage ion channelsKv7 and Nav1.7 IND‑enabling; Nav1.1 preclinical disease modification signals Multiple 2025 INDs expected Kv7 (XEN1120) Phase 1 underway; Nav1.7 Phase 1 Q3; Nav1.1 IND‑enabling Transitioning to FIH
Supply chain/site executionQuality sites; electronic diaries to manage placebo effect —Metrics monitored (screening, compliance, rollover), consistent with Phase 2b Ongoing rigor
Regulatory/legal—CFO transition noted; consulting agreement Cash runway reiterated; active engagement with regulators for BPD/MDD Stable; execution focus

Management Commentary

  • “We are nearing the end of patient recruitment in X‑TOLE2... topline results in early 2026... slight delay versus prior guidance... approaching the conclusion of this study.” — Ian Mortimer.
  • “Azetukalner demonstrated consistent and numerically greater improvements on MADRS and SHAPS at all time points measured... >4‑point and >3‑point separation at week 6...” — Christopher Kenney on Mount Sinai IST.
  • “Based on current operating plans... we anticipate having sufficient cash to fund operations into 2027.” — Sherry Aulin.
  • “Approximately 1 in 3 patients on drug for at least 36 months [OLE] achieving seizure freedom for a year or longer.” — Company reinforcing long-term efficacy.
  • “Approximately ~6 months from top line data to filing... clinical data on critical path; CMC/nonclinical in good shape.” — Ian Mortimer.

Q&A Highlights

  • NDA timing: ~6 months from topline to NDA filing; sections being drafted ahead of data; clinical is critical path.
  • Enrollment details: variability across many sites; added a few late sites; screen failure rates similar to Phase 2; recruitment completion “next few months.”
  • Powering: >99% at 25mg and >90% at 15mg; no plan to over-enroll beyond ~360; effect-size erosion considered; statistical coverage deemed adequate.
  • Seizure freedom: not in statistical hierarchy (focus on week‑1 onset and primary MPC); long-term OLE data informs seizure freedom narrative.
  • BPD design: mixed bipolar I/II; stratification under consideration; monotherapy vs adjunctive details to come at trial initiation.
  • Pediatric: agreed plans with FDA/EMA; PGTCS already down to age 12; pediatric formulation/toxicology ongoing.

Estimates Context

  • Q1 2025 beat: Revenue $7.50M vs consensus $1.91M; EPS -$0.83 vs consensus -$0.90; counts: 16 revenue, 13 EPS estimates.*
  • Prior quarter EPS (Q4 2024) tracked consensus closely (-$0.84 actual vs -$0.84 estimate), underscoring consistency.*
  • Implication: Street likely to adjust near-term models to reflect milestone revenue dynamics and sustained OpEx trajectory; topline delay to early 2026 may push commercialization and revenue ramp assumptions one to two quarters out.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term catalyst: X‑TOLE2 recruitment completion in the coming months and subsequent narrowing of topline guidance will be stock-moving; expect heightened sensitivity to any enrollment/QA updates.
  • Bold result: Q1 delivered a consensus beat on both revenue and EPS driven by collaboration milestone and disciplined OpEx pacing; however, sustained R&D build signals ongoing cash burn into topline. *
  • Timeline risk now explicit: topline shift to early 2026 pushes potential NDA submission and launch into the following periods; trading setups should reflect extended catalyst timing and pre-commercial spend.
  • Thesis durability: Long-term OLE seizure freedom (~1 in 3 at ≥36 months) and week‑6 clinical scale deltas in depression continue to differentiate azetukalner’s profile across epilepsy and neuropsychiatry.
  • Regulatory path clarity: ~6 months to NDA post-topline and strong CMC/nonclinical footing lower execution risk post‑data; focus remains on clinical efficacy.
  • Pipeline breadth: Multiple first-in-human programs (Kv7, Nav1.7) and BPD/MDD Phase 3 initiations provide diversified catalyst stack beyond FOS readout; supports medium-term value creation.
  • Trading lens: Expect sentiment to hinge on enrollment completion, AES/AAN medical narratives, and any interim operational updates; strong balance sheet mitigates financing overhang into 2027.