Xenon Pharmaceuticals Reports Third Quarter 2019 Financial Results and Provides Corporate UpdateThursday, November 14, 2019
Burnaby, BC, November 14, 2019--(T-Net)--Xenon Pharmaceuticals Inc. (Nasdaq:XENE), a clinical stage biopharmaceutical company, today reported its financial results for the third quarter ended September 30, 2019 and provided a corporate update.
Dr. Simon Pimstone, Xenon's Chief Executive Officer, said, "We continue to make strong progress in advancing our portfolio of neurology-focused candidates. Patient enrollment is ongoing across sites in the U.S., Canada, and Europe for our XEN1101 Phase 2b clinical trial in adult focal epilepsy. We have completed development of pediatric-specific formulations for both our XEN496 and XEN901 programs, and we are currently conducting pharmacokinetic studies in healthy adult volunteers to support the anticipated pediatric clinical trials in both KCNQ2- and SCN8A-related developmental and epileptic encephalopathies."
Dr. Pimstone continued, "Looking ahead, we anticipate a number of important milestone opportunities across our epilepsy pipeline, including XEN901, XEN496, and XEN1101. We have numerous activities and scientific posters planned at the upcoming American Epilepsy Society (AES) Annual Meeting in Baltimore, and look forward to connecting with our network of leading physicians, clinicians, and scientific advisory board members, as well as patients and advocacy groups. We anticipate having multiple mid to late stage epilepsy clinical trials underway in 2020 putting us in a position to generate important clinical data across our portfolio."
Dr. Pimstone added, "We are delighted to announce the initiation of a physician-led Phase 2 study examining the efficacy of XEN007 in pediatric patients diagnosed with treatment-resistant childhood absence epilepsy."
Dr. Pimstone continued, "This past quarter we also successfully completed a transaction when Flexion Therapeutics acquired XEN402 for development as FX301 for pain. We believe FX301's extended release formulation from a thermosensitive hydrogel could be well suited for control of post-operative pain based on the in vivo data generated with XEN402, and we look forward to its progression through clinical development."
Highlights and Anticipated Milestones
Third Quarter 2019 Financial Results
Cash and cash equivalents and marketable securities as of September 30, 2019 were $94.6 million, compared to $119.3 million as of December 31, 2018. There were 25,868,594 common shares and 1,016,000 Series 1 Preferred Shares, which are convertible into common shares on a one-for-one basis at the option of the holder, subject to certain limitations, outstanding as of September 30, 2019.
Based on current assumptions, which include fully supporting the planned clinical development of XEN496, XEN1101, XEN901 and XEN007, Xenon anticipates having sufficient cash to fund operations into 2021, excluding any revenue generated from existing partnerships or potential new partnering arrangements.
For the quarter ended September 30, 2019, Xenon reported total revenue of $3.5 million in connection with the agreement entered into in September 2019 with Flexion Therapeutics, Inc. for the global rights to develop and commercialize XEN402. No revenues were recognized in the comparative quarter.
Research and development expenses for the quarter ended September 30, 2019 were $9.8 million, compared to $6.2 million for the same period in 2018. The increase of $3.5 million was primarily attributable to increased spending on our clinical development product candidates XEN496, XEN901 and XEN1101.
General and administrative expenses for the quarter ended September 30, 2019 were $2.7 million, compared $1.9 million for the same period in 2018. The increase of $0.8 million was primarily attributable to increased legal expenses for intellectual property protection and increased costs for recruitment activities.
Other income for the quarter ended September 30, 2019 was $0.1 million, compared to other expenses of $0.2 million for the same period in 2018. The change of $0.3 million was primarily driven by a decrease in interest expense incurred on a term loan.
Net loss for the quarter ended September 30, 2019 was $8.9 million, compared to $14.4 million for the same period in 2018. The change was primarily attributable to a one-time payment made in September 2018 for the buy-out of all future milestone payments and royalties owed with respect to the XEN1101 program and revenue recognized in the current quarter pursuant to the agreement with Flexion, partially offset by higher research and development and general and administrative expenses as compared to the same period in 2018.
At-the-Market Equity Offering
Xenon also announced today that it has entered into an at-the-market equity offering sales agreement with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated, under which Xenon may sell its common shares, from time-to-time, for up to $50.0 million in aggregate sales proceeds in "at the market" transactions. Sales of the common shares, if any, will only be conducted in the United States through the Nasdaq or another exchange at market prices. No sales of common shares will be made in Canada.
|XENON PHARMACEUTICALS INC.|
|Condensed Consolidated Balance Sheets|
|(Expressed in thousands of U.S. dollars)|
|September 30,||December 31,|
|Cash and cash equivalents and marketable securities||$||94,603||$||119,306|
|Other current assets||1,875||2,026|
|Accounts payable and accrued expenses||7,923||4,119|
|Other current liabilities||3,774||—|
|Shareholders ' equity||$||74,564||$||103,295|
|Total liabilities and shareholders ' equity||$||98,904||$||122,428|
|XENON PHARMACEUTICALS INC.|
|Condensed Consolidated Statements of Operations|
|(Expressed in thousands of U.S. dollars except share and per share amounts)|
|Three Months Ended September 30,||Nine Months Ended September 30,|
|Research and development||9,751||6,248||27,093||17,232|
|General and administrative||2,700||1,938||7,628||6,354|
|Buy-out of future milestones and royalties||—||6,000||—||6,000|
|Total operating expenses||12,451||14,186||34,721||29,586|
|Loss from operations||(8,951||)||(14,186||)||(31,221||)||(29,586||)|
|Other income (loss)||85||(205||)||1,015||3,643|
|Loss before income taxes||(8,866||)||(14,391||)||(30,206||)||(25,943||)|
|Income tax (expense) recovery||(5||)||8||(13||)||4|
|Net loss and comprehensive loss||(8,871||)||(14,383||)||(30,219||)||(25,939||)|
|Net loss attributable to preferred shareholders||(336||)||(1,621||)||(1,146||)||(2,506||)|
|Net loss attributable to common shareholders||$||(8,535||)||$||(12,762||)||$||(29,073||)||$||(23,433||)|
|Net loss per common share:|
|Basic and diluted||$||(0.33||)||$||(0.63||)||$||(1.13||)||$||(1.34||)|
|Weighted-average common shares outstanding:|
|Basic and diluted||25,793,482||20,306,298||25,773,732||17,472,403|
About Xenon Pharmaceuticals Inc.
We are a clinical stage biopharmaceutical company committed to developing innovative therapeutics to improve the lives of patients with neurological disorders, including rare central nervous system (CNS) conditions. We are advancing a novel product pipeline of neurology therapies to address areas of high unmet medical need, with a focus on epilepsy. For more information, please visit www.xenon-pharma.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. These forward-looking statements and supporting assumptions are not based on historical fact, and include statements regarding the timing of and results from clinical trials and pre-clinical development activities, including those related to XEN496, XEN901, XEN1101, XEN007 and our other product candidates; the potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of XEN496, XEN901, XEN1101, XEN007 and our other product candidates; the anticipated timing of IND, or IND equivalent, submissions and the initiation of future clinical trials for XEN496, XEN901, XEN1101, XEN007 and our other product candidates; the efficacy of our clinical trial designs; our ability to successfully develop and achieve milestones in the XEN496, XEN901, XEN1101, XEN007 and other development programs; the timing and results of our interactions with regulators; the potential to advance certain of our product candidates directly into Phase 2 or later stage clinical trials; anticipated enrollment in our clinical trials; the progress and potential of our other ongoing development programs; the sufficiency of our cash to fund operations into 2021; the potential receipt of milestone payments and royalties from our collaborators and partners; the timing of potential publication or presentation of future clinical data and the sale of any common shares pursuant to the at-the-market equity offering, including the price, volume and timing of any distributions.
These forward-looking statements are based on current assumptions that involve risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties, many of which are beyond our control, include, but are not limited to: clinical trials may not demonstrate safety and efficacy of any of our or our collaborators' product candidates; our assumptions regarding our planned expenditures and sufficiency of our cash to fund operations may be incorrect; our ongoing discovery and pre-clinical efforts may not yield additional product candidates; any of our or our collaborators' product candidates may fail in development, may not receive required regulatory approvals, or may be delayed to a point where they are not commercially viable; we may not achieve additional milestones in our proprietary or partnered programs; regulatory agencies may not permit certain of our product candidates to advance directly into a Phase 2 or later clinical trials, may impose additional requirements or delay the initiation of clinical trials; the impact of competition; the impact of expanded product development and clinical activities on operating expenses; adverse conditions in the general domestic and global economic markets; as well as the other risks identified in our filings with the Securities and Exchange Commission and the securities commissions in British Columbia, Alberta and Ontario.
These forward-looking statements speak only as of the date hereof and we assume no obligation to update these forward-looking statements, and readers are cautioned not to place undue reliance on such forward-looking statements.
"Xenon" and the Xenon logo are registered trademarks or trademarks of Xenon Pharmaceuticals Inc. in various jurisdictions. All other trademarks belong to their respective owner.
Burnaby, BC (Biotech/Life Sciences)
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