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Xenon Pharmaceuticals Inc. (XENE)·Q4 2024 Earnings Summary

Executive Summary

  • Xenon reported Q4 2024 net loss of $65.7M (−$0.84 per share) vs. $44.7M (−$0.64) in Q4 2023, driven by higher R&D to advance azetukalner Phase 3 epilepsy and neuropsychiatry programs; cash/marketable securities were $754.4M with runway into 2027 .
  • Pipeline momentum: first Phase 3 FOS topline remains H2 2025; Phase 3 MDD (X‑NOVA2) is enrolling with X‑NOVA3 to initiate mid‑2025; a Phase 3 bipolar depression program will initiate mid‑2025; early‑stage IND filings (Kv7, Nav1.7) anticipated in 2025 .
  • Clinical durability: long‑term OLE shows ~85% median seizure frequency reduction at month 36 and 32.7% seizure freedom ≥12 months for patients on drug ≥36 months; >700 patient‑years of exposure support safety/efficacy profile .
  • Collaboration milestone: Neurocrine’s Nav1.2/Nav1.6 inhibitor advanced into Phase 1, triggering an anticipated $7.5M payment to Xenon .

What Went Well and What Went Wrong

What Went Well

  • Clear clinical catalysts with maintained timelines: Phase 3 FOS topline in H2 2025 remains on track, supporting potential NDA and first commercial launch in epilepsy; management reiterated confidence and commercialization preparation .
  • Strong and durable efficacy signals in OLE: ~85% seizure reduction at 36 months and 32.7% seizure‑free ≥12 months for those treated ≥36 months; consistent safety and long‑term retention (52% at 36 months) .
  • Broadened development footprint: Q4 call announced registrational Phase 3 bipolar depression program; MDD Phase 3 is active with a second study starting mid‑2025; management emphasized Kv7’s differentiated mechanism and mood‑related potential (anhedonia, rapid onset, tolerability) .

What Went Wrong

  • Higher operating loss as programs scale: Q4 R&D rose to $59.5M (from $41.1M y/y) and G&A to $18.0M (from $12.6M y/y), lifting quarterly net loss to $65.7M (from $44.7M y/y) as Phase 3 footprint and pre‑commercial activities expand .
  • Other income declined sequentially: Q4 other income was $7.9M vs. $10.6M in Q3, modestly reducing the non‑operating offset to higher OpEx .
  • CFO transition introduces execution risk: CFO Sherry Aulin will step down June 30, 2025 (remaining as advisor through August), though management underscored a planned, smooth transition .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
R&D Expense ($USD Millions)$41.1 $49.7 $57.0 $59.5
G&A Expense ($USD Millions)$12.6 $19.4 $16.7 $18.0
Other Income ($USD Millions)$8.7 $10.8 $10.6 $7.9
Net Loss ($USD Millions)$(44.7) $(57.9) $(62.8) $(65.7)
EPS Basic & Diluted ($)$(0.64) $(0.75) $(0.81) $(0.84)
Cash, Cash Eq. & Marketable Securities ($USD Millions)$930.9 (Year‑end 2023) $850.6 (6/30/24) $803.3 (9/30/24) $754.4 (12/31/24)

Notes:

  • Revenue and margins: Not applicable (pre‑commercial stage) .
  • Cash runway into 2027 reiterated .

KPIs and Clinical Durability

KPIPrior PeriodsCurrent (Q4 2024 context)Source
Patient‑years of exposure (OLE)>600 patient‑years (Q3) ; “beyond 600” (Q2) >700 patient‑years (Feb 27 update)
Median seizure frequency reductionNA~85% at month 36 in OLE
Seizure freedomNA32.7% (48/147) of ≥36‑month OLE patients achieved ≥12 months seizure freedom
OLE retentionNA12/24/36 months: 66%/60%/52%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayCorporate“Into 2027” (Q3 2024) “Into 2027” (Q4 2024) Maintained
FOS Phase 3 topline timingH2 2025H2 2025 (Q3 PR) H2 2025 reaffirmed (Q4 PR/call) Maintained
MDD X‑NOVA2 status2024–2025Expected to initiate by year‑end 2024 Enrolling (active) Progressed (initiated)
MDD X‑NOVA3 timing2025Not specifiedInitiate mid‑2025 New
Bipolar Depression Phase 32025Not specifiedInitiate mid‑2025 (2 studies across Bipolar I/II depression) New
Early‑stage IND filings (Kv7, Nav1.7)2025Multiple INDs/equivalents in 2025 Multiple regulatory filings (INDs/equivalents) in 2025 Maintained
Neurocrine Nav1.2/1.62025IND‑enabling; aim to progress to human studies in 2025 Advanced into Phase 1; anticipated $7.5M milestone Achieved/raised

Earnings Call Themes & Trends

TopicQ2 2024 (Q‑2)Q3 2024 (Q‑1)Q4 2024 (Current)Trend
Epilepsy FOS Phase 3 timelineTopline H2 2025; Kv7 leadership; OLE extended to 7 years Topline H2 2025 reaffirmed; 5 AES abstracts planned Topline H2 2025 reiterated; NDA path emphasized Consistent
Long‑term OLE efficacy/safetyReference to 600+ PY, long‑term dataset AES preview of 36‑month data ~85% reduction at 36 months; 32.7% seizure freedom; robust retention Strengthening
MDD Phase 3First Phase 3 to initiate H2 2024 First Phase 3 (X‑NOVA2) expected by year‑end X‑NOVA2 enrolling; X‑NOVA3 mid‑2025 Advancing
Bipolar depressionNot in scopeNot highlightedNew Phase 3 program; rationale: genetics, Kv7 downregulation, tolerability; mono vs adjunct details forthcoming Expansion
Early‑stage pipeline (Kv7, Nav1.7, Nav1.1)Multiple INDs in 2025 IND plans reiterated; Nav1.1 nomination expected 2025 Multiple filings expected 2025; robust preclinical Nav1.1 data; investor webinar planned Building
Collaboration progressNeurocrine next lead in IND‑enabling Nav1.2/1.6 in IND‑enabling for 2025 start Nav1.2/1.6 advanced to Phase 1; milestone payment Positive

Management Commentary

  • “We expect the next 12 to 24 months will represent a catalyst‑rich period…The anticipated readout from our Phase 3 study in focal onset seizures signifies an important inflection point and could set the stage for our first potential commercial product launch in epilepsy.” – Ian Mortimer, CEO .
  • “Approximately 1 in 3 patients on azetukalner for at least 36 months achieved 100% seizure reduction…with sustained monthly reduction in seizure frequency – approximately 85% at month 36 – and a consistent safety profile.” – Dr. Chris Kenney, CMO (AES 2024 OLE data) .
  • “Based on…attributes such as once‑daily dosing without the need for titration, a rapid onset of effect, novel mechanism…we believe that azetukalner represents a potentially best‑in‑class antiseizure medication that could be paradigm shifting.” – Ian Mortimer .
  • “We anticipate having sufficient cash to fund operations into 2027.” – Sherry Aulin, CFO .

Q&A Highlights

  • FOS Phase 3 timing and enrollment: Company affirmed H2 2025 topline and will narrow timing closer to the event; enrollment specifics not disclosed yet .
  • Efficacy threshold for “success” in FOS: Management prioritized statistical significance enabling NDA filing; broader best‑in‑class framing integrates mechanism, no titration, rapid onset, and long‑term data .
  • Bipolar depression program details: Registrational Phase 3 across Bipolar I/II depression begins mid‑2025; design specifics (mono vs adjunct) to be disclosed pre‑initiation; strong genetic/mechanistic rationale .
  • Commercial landscape and differentiation: XCOPRI’s performance underscores unmet need; azetukalner seen as potential first branded choice post‑generics given no titration, tolerability, and potential mood benefit .
  • Mood/comorbid endpoints in FOS Phase 3: Exploratory PROs (GAD‑7, Beck Depression Inventory) collected at every visit; not powered for label claims but may characterize comorbidities .

Estimates Context

  • We attempted to retrieve S&P Global consensus EPS and revenue for Q4 2024 and the prior two quarters; data could not be retrieved due to S&P Global daily request limits. As a result, estimate comparisons are not shown here. Values would normally be sourced from S&P Global; unavailable in this instance.*

Financials vs Estimates (contextual)

MetricQ3 2024 ActualQ4 2024 ActualQ4 2024 Consensus
Revenue ($USD Millions)N/A (pre‑commercial) N/A (pre‑commercial) N/A (S&P Global unavailable)*
EPS (Primary) ($)$(0.81) $(0.84) N/A (S&P Global unavailable)*

*Values would be retrieved from S&P Global; consensus unavailable due to request limits.

Key Takeaways for Investors

  • The H2 2025 FOS Phase 3 readout remains the central value inflection point; positive results would enable NDA and first commercial launch in epilepsy .
  • Long‑term OLE data (85% median seizure reduction at 36 months; ~33% seizure freedom ≥12 months) materially de‑risks clinical efficacy durability and supports potential best‑in‑class positioning .
  • Neuropsychiatry expansion is now a second pillar: MDD Phase 3 is active and BPD Phase 3 will initiate mid‑2025; management underscores Kv7 differentiation in mood (anhedonia, rapid onset, tolerability) .
  • Collaboration execution added non‑dilutive capital: Neurocrine’s Nav1.2/1.6 asset entered Phase 1, triggering an anticipated $7.5M milestone .
  • Operating spend will remain elevated through 2025–2026 as multiple Phase 3 programs run in parallel; cash runway into 2027 reduces near‑term financing overhang .
  • Pre‑commercial build progressing ahead of potential epilepsy launch; commercial framing emphasizes once‑daily, no titration, and potential mood benefit as differentiators vs incumbents .
  • Near‑term watch items: MDD investigator‑sponsored Phase 2 fMRI results in H1 2025, X‑NOVA3 initiation mid‑2025, Bipolar Phase 3 initiation mid‑2025, and FOS Phase 3 topline in H2 2025 .

Citations:

  • Q4 2024 press release and 8‑K financials, timelines, cash runway:
  • Q4 2024 earnings call transcript (prepared remarks and Q&A):
  • Q3 2024 press release (financials and guidance):
  • Q2 2024 press release (financials and guidance):
  • AES 2024 data (OLE durability and retention; mental health/comorbidity context; Nav1.1 preclinical):
  • Additional Q4 2024 conference preview: