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Xenon Pharmaceuticals Inc. (XENE)·Q2 2025 Earnings Summary

Executive Summary

  • Completed patient recruitment in pivotal Phase 3 X-TOLE2 (focal onset seizures); topline remains guided for early 2026; management reiterated an estimated ~6 months from topline to NDA filing, positioning azetukalner for potential first approval thereafter .
  • Q2 results in line with a development-stage profile: revenue $0.0 and net loss $(84.7)M; diluted EPS $(1.07) vs S&P Global consensus $(0.99), a modest miss on higher R&D as Phase 3 programs ramped . Consensus figures from S&P Global.
  • Neuropsychiatry expansion advanced: Phase 3 X-NOVA3 (MDD) and X-CEED (BPD I/II) were initiated during the quarter, broadening azetukalner’s late-stage footprint .
  • Operating momentum and commercial build continued: Darren Cline appointed Chief Commercial Officer; cash and marketable securities of $624.8M fund operations into 2027—adequate to reach key readouts and filing milestones .
  • Pipeline depth increased: Phase 1 initiated for lead Nav1.7 pain candidate (XEN1701) and ongoing Phase 1 for Kv7 (XEN1120), creating additional 2025–2026 data catalysts beyond epilepsy .

What Went Well and What Went Wrong

  • What Went Well

    • X-TOLE2 recruitment completed, keeping early-2026 topline on track; management emphasized design continuity and strong powering versus Phase 2b results (“more than 99% power” at 25 mg; “>90%” at 15 mg) .
    • Late-stage neuropsychiatry programs advanced with the initiation of X-NOVA3 (MDD) and X-CEED (BPD), with clear rationale for MADRS in BPD and site leverage potential across programs .
    • Commercial readiness strengthening: “The data … are truly compelling … showcasing its potential to be paradigm shifting,” said new CCO Darren Cline as the company prepares for epilepsy launch pathways .

  • What Went Wrong

    • EPS modestly missed consensus in Q2 on higher R&D tied to multiple Phase 3 studies; diluted EPS $(1.07) vs consensus $(0.99) as total operating expenses rose to $94.2M from $69.1M YoY . Consensus figures from S&P Global.
    • Timeline slippage earlier in the year persisted (topline moved from H2’25 guidance in Q4’24 to early 2026 in Q1’25); Q2 reiterated early 2026, though recruitment completion de-risks execution .
    • Revenue remains negligible absent commercial products; milestone variability (e.g., Q1’s $7.5M) underscores continued dependence on financing and partnership economics until approval .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$0.0*$7.5 $0.0
Net Loss ($USD Millions)$(65.7) $(65.0) $(84.7)
Diluted EPS ($)$(0.84) $(0.83) $(1.07)
Total Operating Expenses ($USD Millions)$77.5 $80.2 $94.2
R&D Expense ($USD Millions)$59.5 $61.2 $75.0
G&A Expense ($USD Millions)$18.0 $19.0 $19.2
Cash & Marketable Securities ($USD Millions)$754.4 $691.1 $624.8
  • Revenue and EPS vs S&P Global consensus (actuals cited; consensus from S&P Global):
MetricQ4 2024Q1 2025Q2 2025
Revenue – Actual ($USD Millions)$0.0*$7.5 $0.0
Revenue – Consensus ($USD Millions)$0.31*$1.91*$0.00*
EPS – Actual ($)$(0.84) $(0.83) $(1.07)
EPS – Consensus ($)$(0.84)*$(0.90)*$(0.99)*
EPS – # of Estimates12*13*13*
Revenue – # of Estimates16*16*15*

*Values retrieved from S&P Global.

  • Segment breakdown: Not applicable; no commercial product revenues reported .
  • KPIs: Focus items include R&D intensity (Phase 3 execution), cash runway (into 2027), and operating expense trajectory .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
X-TOLE2 patient recruitmentFOS Phase 3“Expected to complete in the next few months” (Q1’25) Completed (Q2’25) Achieved
X-TOLE2 topline timingFOS Phase 3Early 2026 (Q1’25; revised from H2’25 in Q4’24) Early 2026 (affirmed) Maintained
X-NOVA3 initiationMDD Phase 3On track to initiate mid-year Initiated; underway Achieved
X-CEED initiationBPD Phase 3Expected by mid-year Initiated Achieved
Cash runwayCorporateInto 2027 Into 2027 Maintained
NDA timing post-toplineRegulatoryNot explicit previouslyApprox. ~6 months post-topline to file NDA (management commentary) Introduced/Clarified

No quantitative revenue, margin, or tax guidance provided .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Epilepsy Phase 3 execution (X-TOLE2)H2’25 topline (Q4’24) later revised to early 2026; nearing end of recruitment; metrics consistent with Phase 2b (Q1’25) Recruitment completed; early 2026 topline; powering robust; careful control of placebo drivers (geography, baselines) Progressing; execution de-risked
Neuropsychiatry expansion (MDD/BPD)X-NOVA2 enrolling; X-NOVA3 & BPD to initiate mid-year; IST showed drug activity (MADRS/SHAPS) X-NOVA3 and X-CEED initiated; MADRS appropriate for BPD; mania monitored as safety Accelerating
Commercial buildCFO transition noted (Q4’24) CCO hired; launch planning focus Building
Early-stage pain (Kv7/Nav1.7)IND filings anticipated 2025 XEN1701 Phase 1 initiated; XEN1120 Phase 1 underway Advancing
Regulatory/filing cadence~6 months from topline to NDA (framework) Reiterated ~6 months topline-to-NDA Consistent
Long-term efficacy data (OLE)36-month OLE maintained efficacy/safety (AAN) ~1/3 on ≥36 months achieved 1-year seizure freedom (OLE) Strengthening evidence
Cash runwayInto 2027 Into 2027 Maintained

Management Commentary

  • “The completion of patient recruitment for our Phase 3 X-TOLE2 study is a significant milestone … on track to report topline results in early 2026” — Ian Mortimer, CEO .
  • “We have more than 99% power [25 mg] and more than 90% power [15 mg] … the bar is statistical significance to support an NDA filing” — Ian Mortimer (on X-TOLE2 powering and objectives) .
  • “Approximately one third of patients on azetukalner for at least 36 months have achieved seizure freedom for a year or more” — Darren Cline, CCO (OLE data) .
  • “X-NOVA3 [MDD] and EXCEED [BPD] have been initiated … MADRS as the primary endpoint is appropriate for BPD” — Christopher Kenney, CMO .

Q&A Highlights

  • NDA timing and path: Management reiterated ~6 months from X-TOLE2 topline to NDA filing; nonclinical/CMC workstreams already underway, with clinical data on the critical path .
  • X-TOLE2 powering and placebo control: Study designed for three arms (~360 total); >99% power at 25 mg, >90% at 15 mg; careful geographic/site management to mitigate placebo variability; intent is statistical significance to support filing .
  • Dose strategy: Expectation for dose-response (15 mg vs 25 mg) in Phase 3; preference to have multiple doses on label to address exposure variability and background meds .
  • Nav1.7 safety and PoC: No preclinical cardiovascular signals observed; early PK/AE data will guide; PoC studies likely in postoperative pain settings (e.g., bunionectomy, abdominoplasty) after Phase 1 .
  • BPD program design: Monotherapy, MADRS primary, ~400 patients per study with potential sample-size increase to ~470 at interim if underpowered; Type I/II stratification used; mania tracked primarily as a safety outcome .

Estimates Context

  • Q2 2025 vs S&P Global consensus: Revenue $0.0 in line; EPS $(1.07) vs $(0.99) consensus (miss of ~$0.08), driven by higher R&D and total operating expenses as multiple Phase 3 programs ramped . Consensus figures from S&P Global.
  • Prior quarters: Q1 2025 EPS $(0.83) beat consensus $(0.90); Q4 2024 EPS $(0.84) matched consensus . Consensus figures from S&P Global.
  • Estimate implications: With X-TOLE2 recruitment completed and expenses elevated into multiple late-stage programs, near-term OpEx/EPS consensus may drift higher (more negative EPS) through database lock. Cash runway into 2027 likely keeps liquidity assumptions intact .

Key Takeaways for Investors

  • Execution de-risked: Completion of X-TOLE2 recruitment is a key inflection; early-2026 topline anchored, with ~6 months to NDA filing thereafter if positive—clear medium-term catalyst path .
  • Modest EPS miss reflects planned R&D ramp across three late-stage programs (FOS/PGTCS, MDD, BPD); operational momentum more important than near-term P&L in a pre-revenue biotech .
  • Neuropsychiatry optionality strengthening: Both X-NOVA3 (MDD) and X-CEED (BPD) initiated, broadening label expansion potential beyond epilepsy and creating sequential readout opportunities .
  • Compelling long-term epilepsy profile: OLE data indicate ~1/3 of long-term patients achieving 1-year seizure freedom, a clinically meaningful differentiator that could support adoption upon approval .
  • Commercial build underway: New CCO with epilepsy launch pedigree (Epidiolex) strengthens launch readiness ahead of potential approval .
  • Pipeline catalysts beyond epilepsy: Nav1.7 and Kv7 pain programs in-human add 2025–2026 readouts that can diversify the story and valuation drivers .
  • Liquidity adequate: $624.8M cash and marketable securities funds operations into 2027—sufficient to reach topline, NDA, and initial commercialization milestones without near-term financing .
Notes on sources:
- Company press release and 8-K (Item 2.02) for Q2 2025 results and detailed financials **[1582313_7dc612a1bd204ecfa90abd86ffe18c0f_0]** **[1582313_0000950170-25-106529_xene-20250811.htm:1]****[1582313_0000950170-25-106529_xene-ex99_1.htm:0]**
- Earnings call transcript for management commentary and Q&A **[1582313_2072096_0]**
- Prior quarters: Q1 2025 press release and call **[1582313_86835f7bf8eb41a38d77d397208b73fb_0]** **[1582313_XENE_3427728_0]**, Q4 2024 press release **[1582313_54ee0396a4114f05a723fc70c9d771c4_0]**
- Consensus estimates (revenue and EPS) are from S&P Global.