Xenon Pharmaceuticals Inc.: Initiation of Research Coverage

Friday, January 10, 2020

William Blair & Company initiated research coverage of Xenon Pharmaceuticals Inc. (XENE $13.49), a clinical-stage biopharmaceutical company focused on developing therapies for neurological disorders including rare pediatric epileptic encephalopathies and generalized epilepsies.

Analyst Tim Lugo said, "Xenon is focused on developing a platform of selective voltage-gated ion channel modulators for epileptic indications led by XEN496 positioned for targeted treatment of KCNQ2-EE, a rare pediatric epileptic encephalopathy, with immediate seizure onset from birth. The active ingredient of XEN496 is ezogabine, a potassium channel opener, which was previously marketed as Potiga by GlaxoSmithKline for partial-onset seizures. Xenon is also developing XEN1101, a once-daily oral potassium channel opener, for the adjunctive treatment of adults experiencing refractory partial-onset seizures, and believes it may avoid the benign skin and eye discoloration adverse effects and be more effective at lower doses than Potiga, which was discontinued due to low demand in the general epilepsy market. In addition, the company has licensed XEN901, a NaV1.6 subunit-selective antagonist for the treatment of orphan pediatric epilepsy SCN8A-EE, to Neurocrine Biosciences."

Lugo continued, "We expect Xenon to become a major player in the treatment of orphan pediatric EEs and in the broader epilepsy market as we believe the company possesses a differentiated portfolio of agents, primarily from a safety and tolerability standpoint, but with de-risked mechanisms of action given the known efficacy of both potassium channel potentiation and sodium channel blockade in conferring seizure control in epileptic patients. We predict market entry for XEN496 into the KCNQ2-EE market in the second half of 2021 after completion of a Phase III trial in 20 patients, and Phase II assets XEN1101 and XEN901 being commercialized in the 2023-2024 time frame."

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Outperform (Buy): 69%
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