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Xenon (XENE) Q2 Earnings Miss, Pipeline in Focus, Stock Down
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Xenon Pharmaceuticals Inc. (XENE - Free Report) reported a loss of 75 cents per share for the second quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 72 cents. The company had incurred a loss of 72 cents per share in the year-ago quarter.
In the reported quarter, Xenon did not generate any revenues. Due to the absence of a marketed product, the company only recognizes periodic collaboration revenues in its top line from its ongoing partnership with Neurocrine Biosciences (NBIX - Free Report) for XEN901, now known as NBI-921352. The company did not recognize any revenues in the year-ago quarter as well.
NBI-921352 is a selective Nav1.6 sodium channel inhibitor. Neurocrine is currently evaluating NBI-921352 in a phase II study to treat pediatric patients with SCN8A developmental and epileptic encephalopathy. Per the terms of the agreement with NBIX, Xenon is eligible to receive certain clinical, regulatory and commercial milestone-based payments, as well as royalties on future sales.
The stock lost 4.2% in the after-market hours in response to the earnings miss. Year to date, shares of XENE have plunged 11% compared with the industry’s 5.9% decline.
Image Source: Zacks Investment Research
Quarter in Detail
In the second quarter of 2024, research and development (R&D) expenses increased 13% to $49.7 million compared with $44 million in the year-ago period. The uptick was primarily due to increased expenses related to the company’s pre-clinical and discovery programs to advance multiple potential drug candidates.
The rise in R&D costs was, however, partially offset by a decrease in expenses for the XEN496 clinical development program, which Xenon decided to no longer pursue in early 2023.
General and administrative expenses were $19.4 million in the reported quarter, up 67% year over year. The significant rise was on the grounds of increased personnel-related costs, higher stock-based compensation expenses andimproved professional and consulting fees.
Xenon had cash, cash equivalents and marketable securities worth $850.6 million as of Jun 30, 2024, compared with $885.4 million as of Mar 31, 2024. The company expects its existing cash balance to fundits current operating plans,which include the completion of the azetukalner phase III epilepsy studies and fully supporting late-stage clinical development of azetukalner in major depressive disorder (MDD) into 2027.
Pipeline Updates
Xenon has no approved products in its portfolio at the moment. Therefore, pipeline development remains the key focus of the company.
XENE is currently developing azetukalner in late-stage studies for treatingfocal onset seizures (FOS). Under the phase III epilepsy program, two identical phase III studies, X-TOLE2 and X-TOLE3, are evaluating 15 mg or 25 mg doses of azetukalner, administered with food as adjunctive treatment in patients with FOS. The first top-line data readout from the X-TOLE2 study is anticipated in the second half of 2025.
The company is also evaluating azetukalner for primary generalized tonic-clonic seizures in a phase III X-ACKT study, currently enrolling patients, which is intended to support potential regulatory submissions in this additional epilepsy indication.
Xenon has also completed a phase II proof-of-concept study on azetukalner called X-NOVA for patients with MDD.
Based on the success of the mid-stage study, the company met with the FDA during the first quarter and reached alignment regarding the late-stage clinical development program design for azetukalner to treat MDD, which will comprise three phase III clinical studies. Xenon expects to initiate the first phase III study in the second half of 2024.
Xenon is also currently collaborating with the Icahn School of Medicine at Mount Sinai to support an ongoing investigator-sponsored phase II proof-of-concept study of azetukalner for the treatment of MDD in approximately 60 subjects. Patient enrollment in the same is expected to be completed in the third quarter.
Furthermore, XENE is currently evaluating multiple preclinical therapeutic candidates targeting Kv7, Nav1.7 and Nav1.1 across various indications, aiming to advance them into clinical development in 2025.
In the past 60 days, the Zacks Consensus Estimate for Annovis’ 2024 loss per share has remained constant at $2.46. During the same period, the consensus estimate for 2025 loss per share has narrowed from $1.95 to $1.91. Year to date, shares of ANVS have plunged 55.9%.
ANVS beat estimates in three of the trailing four quarters and missed once, delivering an average negative surprise of 1.39%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29. Year to date, shares of AKRO have gained 6.8%.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and matched once, delivering an average negative surprise of 5.10%.
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Xenon (XENE) Q2 Earnings Miss, Pipeline in Focus, Stock Down
Xenon Pharmaceuticals Inc. (XENE - Free Report) reported a loss of 75 cents per share for the second quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 72 cents. The company had incurred a loss of 72 cents per share in the year-ago quarter.
In the reported quarter, Xenon did not generate any revenues. Due to the absence of a marketed product, the company only recognizes periodic collaboration revenues in its top line from its ongoing partnership with Neurocrine Biosciences (NBIX - Free Report) for XEN901, now known as NBI-921352. The company did not recognize any revenues in the year-ago quarter as well.
NBI-921352 is a selective Nav1.6 sodium channel inhibitor. Neurocrine is currently evaluating NBI-921352 in a phase II study to treat pediatric patients with SCN8A developmental and epileptic encephalopathy. Per the terms of the agreement with NBIX, Xenon is eligible to receive certain clinical, regulatory and commercial milestone-based payments, as well as royalties on future sales.
The stock lost 4.2% in the after-market hours in response to the earnings miss. Year to date, shares of XENE have plunged 11% compared with the industry’s 5.9% decline.
Image Source: Zacks Investment Research
Quarter in Detail
In the second quarter of 2024, research and development (R&D) expenses increased 13% to $49.7 million compared with $44 million in the year-ago period. The uptick was primarily due to increased expenses related to the company’s pre-clinical and discovery programs to advance multiple potential drug candidates.
The rise in R&D costs was, however, partially offset by a decrease in expenses for the XEN496 clinical development program, which Xenon decided to no longer pursue in early 2023.
General and administrative expenses were $19.4 million in the reported quarter, up 67% year over year. The significant rise was on the grounds of increased personnel-related costs, higher stock-based compensation expenses andimproved professional and consulting fees.
Xenon had cash, cash equivalents and marketable securities worth $850.6 million as of Jun 30, 2024, compared with $885.4 million as of Mar 31, 2024. The company expects its existing cash balance to fundits current operating plans,which include the completion of the azetukalner phase III epilepsy studies and fully supporting late-stage clinical development of azetukalner in major depressive disorder (MDD) into 2027.
Pipeline Updates
Xenon has no approved products in its portfolio at the moment. Therefore, pipeline development remains the key focus of the company.
XENE is currently developing azetukalner in late-stage studies for treatingfocal onset seizures (FOS). Under the phase III epilepsy program, two identical phase III studies, X-TOLE2 and X-TOLE3, are evaluating 15 mg or 25 mg doses of azetukalner, administered with food as adjunctive treatment in patients with FOS. The first top-line data readout from the X-TOLE2 study is anticipated in the second half of 2025.
The company is also evaluating azetukalner for primary generalized tonic-clonic seizures in a phase III X-ACKT study, currently enrolling patients, which is intended to support potential regulatory submissions in this additional epilepsy indication.
Xenon has also completed a phase II proof-of-concept study on azetukalner called X-NOVA for patients with MDD.
Based on the success of the mid-stage study, the company met with the FDA during the first quarter and reached alignment regarding the late-stage clinical development program design for azetukalner to treat MDD, which will comprise three phase III clinical studies. Xenon expects to initiate the first phase III study in the second half of 2024.
Xenon is also currently collaborating with the Icahn School of Medicine at Mount Sinai to support an ongoing investigator-sponsored phase II proof-of-concept study of azetukalner for the treatment of MDD in approximately 60 subjects. Patient enrollment in the same is expected to be completed in the third quarter.
Furthermore, XENE is currently evaluating multiple preclinical therapeutic candidates targeting Kv7, Nav1.7 and Nav1.1 across various indications, aiming to advance them into clinical development in 2025.
Xenon Pharmaceuticals Inc. Price and Consensus
Xenon Pharmaceuticals Inc. price-consensus-chart | Xenon Pharmaceuticals Inc. Quote
Zacks Rank & Stocks to Consider
Xenon currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Annovis Bio (ANVS - Free Report) and Akero Therapeutics (AKRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the Zacks Consensus Estimate for Annovis’ 2024 loss per share has remained constant at $2.46. During the same period, the consensus estimate for 2025 loss per share has narrowed from $1.95 to $1.91. Year to date, shares of ANVS have plunged 55.9%.
ANVS beat estimates in three of the trailing four quarters and missed once, delivering an average negative surprise of 1.39%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29. Year to date, shares of AKRO have gained 6.8%.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and matched once, delivering an average negative surprise of 5.10%.