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Xenon Pharmaceuticals Inc. (XENE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 results were in line to slightly better vs consensus: EPS of -$1.15 beat S&P Global consensus of -$1.16 by ~$0.01; revenue was $0 vs $0 consensus as the company recorded no collaboration revenue this quarter . Consensus from S&P Global: EPS -$1.16*, Revenue $0*.
  • R&D investment stepped up (to $77.1M vs $57.0M YoY) as Xenon advanced multiple Phase 3 programs for azetukalner (AZK) and Phase 1 pain assets; net loss widened to $90.9M vs $62.8M YoY .
  • XTOL-2 (Phase 3 in focal onset seizures) achieved 380 randomized patients (above ~360 target), with topline timing maintained for early 2026; management reiterated confidence in AZK’s differentiated profile and NDA readiness activities continuing in parallel .
  • Cash, cash equivalents and marketable securities were $555.3M at quarter-end, with runway into 2027 reiterated—sufficient to complete Phase 3 epilepsy, support late-stage neuropsychiatry, and advance early-stage pipeline .

What Went Well and What Went Wrong

  • What Went Well

    • Completed randomization in Phase 3 XTOL-2 at 380 patients (above plan), sustaining the early-2026 topline timeline and strengthening statistical power; management emphasized “high reproducibility” from Phase 2 to Phase 3 in FOS .
    • Pipeline breadth: neuropsychiatry Phase 3 (X‑NOVA2/3 in MDD; X‑CEED in bipolar depression) and pain programs (Nav1.7 XEN1701 and Kv7 XEN1120) both in Phase 1; goal to initiate Phase 2 PoCs next year .
    • Commercial readiness: appointment of CFO Tucker Kelly (extensive commercialization/finance background) to prepare for anticipated AZK launch; management highlighted building the infrastructure and targeting 2027 for larger SG&A ramp post-approval timeline .

  • What Went Wrong

    • No revenue recognized (vs $7.5M in 3Q24), reflecting no milestones this quarter; YoY revenue declined to $0 from $7.5M .
    • Higher operating expenses: R&D rose to $77.1M (from $57.0M YoY) and G&A to $19.3M (from $16.7M YoY), driving net loss to $90.9M (from $62.8M YoY) .
    • Other income fell to $6.1M (from $10.6M YoY) on lower interest income, modestly offsetting the higher spend .

Financial Results

Revenue and EPS vs prior periods and estimates

MetricQ3 2024Q2 2025Q3 2025Consensus (Q3 2025)*Result vs Est.*
Revenue ($USD Millions)$7.5 $0.0 $0.0 $0.0*Inline*
EPS (Basic & Diluted, $)-$0.81 -$1.07 -$1.15 -$1.16*Beat by ~$0.01*

Note: No non-GAAP metrics were provided; results are GAAP.

  • Values retrieved from S&P Global.

Operating metrics (GAAP)

MetricQ3 2024Q2 2025Q3 2025
R&D Expense ($USD Millions)$57.0 $75.0 $77.1
G&A Expense ($USD Millions)$16.7 $19.2 $19.3
Other Income ($USD Millions)$10.6 $8.9 $6.1
Net Loss ($USD Millions)$62.8 $84.7 $90.9

Balance sheet and shares

MetricQ1 2025Q2 2025Q3 2025
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$691.1 $624.8 $555.3
Common Shares Outstanding (Period End)76.59M 76.94M 77.12M
Pre-funded Warrants Outstanding (Period End)2.173M 2.173M 2.173M

No segment breakdown is applicable (pre-commercial biotech). No additional KPIs were disclosed beyond clinical progress items.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
XTOL-2 (AZK in FOS) topline timingEarly 2026Early 2026 (maintained across Q1/Q2) Early 2026; 380 randomized (above target) Maintained; execution de-risked
Cash runwayThrough 2027Into 2027 Into 2027 Maintained
MDD (X‑NOVA2/3)2025–2026X‑NOVA2 enrolling; X‑NOVA3 to initiate mid‑year X‑NOVA2/3 enrolling; timing for first Phase 3 readout to be guided later Progressed (both underway)
Bipolar depression (X‑CEED)2025–2026Initiation expected mid‑year Underway; binary interim may increase N from 400 up to 470 Initiated; added interim design clarity
Pain programs (XEN1701 Nav1.7; XEN1120 Kv7)2025–2026Phase 1 initiation/starts in 2025 Phase 1 SAD/MAD ongoing; aim to enter Phase 2 PoC next year Maintained timeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2025)Trend
Epilepsy (XTOL‑2)Recruitment nearing completion; topline early 2026 380 randomized (above ~360 plan); topline early 2026; strong Phase2→Phase3 reproducibility argued Execution momentum building
Neuropsychiatry (MDD/BPD)MDD X‑NOVA2 enrolling; X‑NOVA3/BPD initiation planned X‑NOVA2/3 and X‑CEED enrolling; BPD uses MADRS, includes sample‑size re‑estimation interim Broadened scope; design clarity
Pain (Nav1.7/Kv7)XEN1120 CTA accepted; XEN1701 IND/Phase 1 targeted Q3’25 Both in Phase 1; PoC targeted next year; mechanism rationale reinforced Advancing to clinical proof‑of‑concept
Commercial readinessHired CCO; building toward launch Hired CFO Tucker Kelly; SG&A ramp heavier post‑2026 given 2027 launch timing Strengthening leadership/infrastructure
Scientific engagement36‑month OLE data at AAN; IEC planned 7 AES abstracts accepted; new 4‑year OLE data to be shown Sustained data flow

Management Commentary

  • “The final number of patients randomized is 380… we remain on track for top-line data readout in early 2026.” — Ian Mortimer, CEO .
  • “Over the last 20 years… placebo‑adjusted seizure reduction… teens into low 30s… it is the overall profile where we believe [AZK] is differentiated… QD dosing with no required titration, no adjustments for DDIs… favorable safety and tolerability profile.” — Ian Mortimer .
  • “Cash, cash equivalents, and marketable securities totaled $555.3 million… we anticipate having sufficient cash to fund operations into 2027.” — Tucker Kelly, CFO .
  • “X‑NOVA2 and X‑NOVA3 [MDD]… X‑CEED [BPD] is underway… BPD trial uses MADRS… with potential increase to 470 patients based on an interim analysis.” — Chris Kenney, CMO .

Q&A Highlights

  • Topline disclosure/NDA prep: Expect key efficacy plus safety/tolerability in topline, with broader datasets at medical meetings; NDA drafting ongoing with XTOL‑2 efficacy the critical path .
  • Screening/baseline failures and MDD timing: Failure rates tracked as expected (insufficient seizures, diary/BMI, etc.); X‑NOVA2 guidance not yet provided, typical 2–2.5 year timelines implied .
  • Efficacy vs tolerability trade‑offs: Physicians prioritize overall profile; AZK’s no‑titration, QD dosing, and potential mood benefit positioned as differentiation vs certain titration/DDI‑heavy ASMs .
  • Background cenobamate: Use likely higher in Phase 3 vs Phase 2; preclinical combos (including cenobamate) did not show tolerability penalties; final reads await unblinding .
  • BPD endpoint/interim: MADRS chosen per bipolar precedents; binary interim to increase N if needed (400→up to 470) to ensure power .
  • Opex cadence: Targeted pre‑launch investments already; larger commercial spend expected post‑2026 consistent with a 2027 launch timeframe .

Estimates Context

  • Q3 2025 EPS of -$1.15 vs S&P Global consensus of -$1.16 (beat by ~$0.01). Revenue of $0 vs $0 consensus (inline). Estimates counts: 13 for EPS, 15 for revenue. Consensus from S&P Global data.*
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Phase 3 execution de‑risking: XTOL‑2 exceeded target enrollment (380 randomized) and remains on track for early‑2026 topline—next major stock catalyst .
  • Differentiation narrative intact: Management continues to stress AZK’s only‑in‑class Kv7 mechanism, no titration, QD dosing, and tolerability as commercial drivers beyond raw efficacy .
  • Near‑term data flow: Multiple AES 2025 presentations (including 4‑year OLE) sustain visibility and physician engagement into year‑end .
  • Pipeline breadth and optionality: Late‑stage expansion into MDD/BPD and two pain assets in Phase 1 create multiple shots on goal in 2026 (including potential Phase 2 PoC starts) .
  • Financial runway intact: $555.3M cash/securities and reiterated runway into 2027 support completion of pivotal epilepsy and late‑stage psych programs without near‑term financing needs, reducing dilution risk before XTOL‑2 readout .
  • Operating spend is purposeful: R&D elevation reflects simultaneous Phase 3 and early‑stage advancement; SG&A build expected to step up more materially post‑2026, aligned with a potential 2027 launch .
  • Trading setup: Into early‑2026 topline, shares are levered to Phase 3 epilepsy success; interim updates (AES data, program enrollments) can influence sentiment; slight EPS beat this quarter is less material than clinical milestones .

Supporting Detail (from Press Release and 8‑K)

  • Q3 2025 financials: R&D $77.1M; G&A $19.3M; other income $6.1M; net loss $90.9M; EPS -$1.15; no revenue recognized; YoY comparables R&D $57.0M, G&A $16.7M, other income $10.6M, net loss $62.8M, EPS -$0.81 .
  • Cash and securities: $555.3M (Sep 30, 2025) with runway into 2027 reiterated .
  • Program status: XTOL‑2 fully randomized; MDD (X‑NOVA2/3) and BPD (X‑CEED) underway; pain programs (XEN1701, XEN1120) in Phase 1; AES 2025 abstracts accepted .