Good day, ladies and gentlemen, and welcome to the Xenon Second Quarter Financial Result Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference may be recorded. I would now like to introduce our host for today's conference, Ms. Jodi Regts Ma'am, you may begin.

Thank you, Crystal. Good afternoon and thank you for joining us on our call and webcast to discuss our financial and operating results for the second quarter of 2016. Joining me on today's call is Dr. Simon Pimstone, Xenon's President and Chief Executive Officer; and Ian Mortimer, Xenon's Chief Financial Officer and Chief Operating Officer. Following this introduction, Simon will provide perspective on Xenon's progress, and then Ian will review our financial results for the quarter ended June 30, 2016. After that, we will open up the call to your questions. Please be advised that during this call we will make a number of statements that are forward-looking, including statements about the sufficiency of our capital position to execute on our business objectives and our ability to operate in a capital efficient manner, the timing of IND or IND equivalent submissions with regulatory agencies, the initiation of future clinical trials, potential efficacy, future development plans and commercial potential of our product candidates, the timing of and results from ongoing clinical trials and preclinical development activities, the commercial launch of Glybera in the European Union, our achievement of certain milestones under our collaboration agreements, the plans of our collaboration partners and their interactions with regulatory agencies, the results of research and development efforts, and the status and timing of additional product candidates and related development activities. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. Today's press release summarizing our second quarter 2016 results and the accompanying quarterly report on form 10-Q are available under the investors sections of our website at www.xenon-pharma.com. Now, I'd like to turn the call over to Simon.

Thanks very much, Jodi, and good afternoon everyone. And thank you for joining Xenon on our conference call and our webcast today. During the first half of this year we continue to execute on our goals and strategies by advancing our research and development pipeline, by supporting our partnerships as well as our proprietary programs and by continuing to operate in a capital efficient manner in order to achieve our near term goals and key value drive is which is hear about. We believe that our business model of leveraging financially well-structured partnerships to participate in large market indications such as Pain, combined with our focus on rare or orphan neurological indications in our proprietary programs such as severe childhood epilepsy disorders is our major strength. The strategy enables us to pursue multiple diverse therapeutic and commercial opportunities, enables us to manage risks and to maximize opportunities for success. We have tremendous amount to look forward to in the coming 6 to 12 months including important catalysts in our proprietary and partner programs. To review our accomplishments and upcoming milestones in the midpoint of this year I'll start with our proprietary assets. Our lead proprietary development program XCN801 is a highly differentiated products for the treatment of moderate to severe acne based on a novel mechanism of action. In February of this year we have advanced 801 into a phase 2 clinical trial which is a progressing well with more than half of a total 150 planned patients enrolled today in our multi-center trial in Canada. XCN801 is a novel selective small molecule inhibitor of Co-A desaturase-1 or SCD1 this is an enzyme involved in lipid symphysis that is highly expressed in sebaceous glands in the skin. Comes in administered in a gel form and is designed to inhibit the…

Thanks Simon and good afternoon everyone. For the quarter ended June 30, 2016 we reported total revenue of $0.4 million compared to $4 million for the same period in 2015. Revenue in both periods was primarily derived from Xenon collaboration agreements with Tether and Genentech. The decrease of $3.6 million was primarily attributable to revenue recognized relating to the upfront payments from the collaborative development and license agreement with tether which was fully recognized by December 2015. As well as revenue related to the upfront payment of the march 2014 collaborative agreement with Genentech which is fully recognized by March 2016. The remaining decrease was due to less full time funding from Genentech as we have shifted resources from supporting our collaborations onto our proprietary programs. Research and development expenses for the quarter ended June 30, 2016 were $5.1 million. This compares to $3.7 million for the same period in 2015, the fair value of liability classified stock options. These stock options were subsequently reclassified back to equity in September 2015. Other income for the quarter was $0.4 million as compared to $1 million for the same period in 2015. this decrease of $0.6 million was primarily attributable to a decrease in unrealized foreign exchange gains arising from the translation of Canadian denominated balances to U.S. dollars as compared to the same period in 2015. Net loss for the quarter was $6 million, compared to a net income of $1.2 million for the same period in 2015 and this change is primarily attributable to lower revenue, higher G&A expenses largely due to that stock based compensation recovery in the second quarter of last year, higher R&D expenses and lower unrealized foreign exchange gains. We ended June 30, 2016 with $50.7 million in cash, cash equivalents and marketable securities which we believe puts us in a continued strong financial position to execute on our near term business objective. As Simon mentioned, we anticipated multiple milestone opportunities from the internal pipeline as well as that from our partners. We continue to manage our financial resources efficiently to support the advancement of our proprietary product pipeline and the successful execution of our corporate goal. With our prepared remarks concluded, operator, we can now open the call up for questions.

Thank you. [Operator instructions] And our first question comes from John Newman from Canaccord. Your line is now open.

Hi, guys. Good afternoon. Thanks for taking the question. I just had a question regarding the 801 data that you are expecting in the first quarter of '17. What type of data do you think you might be showing us in the top-line release? Just wondered if you could describe the primary and secondary end points there. Thanks.

Thanks, John. It's Simon here. Nice to hear from you. John, the primary end points is really the total lesion counts, which includes both inflammatory and non-inflammatory lesions at the end of the 12 week, those being compared to baseline. So it's the percentage change in the total lesion count including both inflammatory and non-inflammatory lesions from baseline to week 12. Secondary end points include the percent changes in inflammatory and/or non-inflammatory lesions differentiating them at different time points throughout the 12 weeks study as well as investigate a global assessment measures and of course a number of others. But the key end points as I highlighted primary being the same change in the total lesion counts from baseline to week 12 broken out individually between inflammatory and non-inflammatory as secondary end points as well as in the absolute changes the secondary end points and as well as the IGA school, which is obviously an important end point to look at. This is our first study, effectively is one of the largest study. It's approved for concept study, but these will begin very acceptable end points of the study.

John, its Ian. We would expect to have a press release in Q1 of next year that would have top-line results for all primary and secondary end points and then the more detailed data with then subsequently be released in a medical need.

Okay. And could you talk about what is being allowed in the study in terms of medications? Just wondering what other things patients are allowed to use to treat their acne during the trial?

There aren't other drugs that they're allowed to use to treat their acne during the trial. We have patient's rescuers in any study obviously that that will be noted and will be assessed. But coming in, these patients need to be off of agents for treatment of their acne and their [indiscernible].

Okay, great. I might ask one more question. On the Roche partnership, I'm trying to recall if this is the first time you have talked about the two drugs targeting pain. I'm just wondering if you can talk a little bit more about what type of pain or if you still waiting on the 'okay' there from Roche Genentech?

Yes. Bottom line is we're waiting for the 'okay' from Roche Genentech on what we can discuss around the indications. We certainly expect that they make the decision to move forward into Phase 2. We'll be able to start to provide better color on what that Phase 2 program looks like. I'm very hopeful that as far as Phase 2 program drawn, we are going to see some standard Phase 2 studies as well. So I don't think this will just be in a single small study. I think they will make a real commitment to the Phase 2 program. But what indications may look like and what studies may look like is something that we can't discuss at this point. We expect to be able to disclose that obviously once we do update on the advance into phase two.

Okay, great. Thank you.

Thanks, John.

Thank you. [Operator instructions] And our next question comes from Hugo Ong from Jefferies. Your line is now open.

Hey, guys. Great. Thanks for taking the questions. On the TV-4570, I was reading over the clinical journal of the team paper recently on the proof of concept study in post-herpetic neuralgia. The paper discussed how the patients had a much longer duration since diagnosis, versus patients in other PHN studies suggesting a more refractory population. Do you expect to have a similarly refractory patient population in the Phase 2B study?

It should be less refractory in the Phase 2B study based on inclusion and exclusion criteria. But as you know, PHN is often a refractory condition. I don't think there's any company today that can look to recruit a study of the size of the patients who have PHN, neuropathic pain just a few months. Typically these patients have had their pain for some years and you can look on the protocol. There should be more information for you on the inclusion criteria and exclusion criteria. Many times these patients are patients who have failed other drugs and come into the clinical study. Typically, it's the number of years, but we think it will be lesser the duration in the study than the prior study. But one can't get away in this condition with a cohort where the duration of their disease is just a few months. That's just always one of the challenges. I think another key differentiator was the shorter duration of dosing in that study. It was a cross over study. There were many very different features of that study – smaller sample size, cross over, different periodicity of treatments and shorter duration of dosing, three versus four weeks. We did actually see in that phase the initial proof of concept Phase 2 trial and increasing effect size from week-to-week, from week one, to week two, to week three, we haven't plateaued. We actually endeavor as we fill in to put that data. It did feel that we were seeing continued improvement over time, not knowing where that ends because we only dose three weeks. But there are some key differentiators between the studies. I've just named I think some of the important ones for you to recognize.

Okay, understood. Thank you. That's very helpful. And on the primary end point of the Phase 2B study, let me just play devil's advocate and let's just say it initially is on the primary end point. Do you still see a path forward for TV-4570 if it shows a strong signal and say the responder analysis?

I think it absolutely comes down to what we see. If we hit on secondary's, if we have a good trained on primary, I'm not quite sure here, but I'm giving you my opinion because we haven't actually had that final discussion with [indiscernible]. But absolutely, I think if we believe there's a signal based on what we see in primary and secondary's and we believe there is a drug effect with the larger sample size and maybe some adjustments to the study design, we think we could even improve that. We absolutely would be interested and I believe we would be interested in ongoing development. We don't know that today. That's a discussion that we need to have, but there's certainly not been a decision made that if we miss on primary from a T value, the product doesn't get developed. That's absolutely not the case. The other important piece as part of the analysis of course is the whole 1150W polymorphism will have reasonably significant percentages or proportions of these cohorts who should be carriers as we typically seen in the past around 20%. So 100 subject plus or minus per arm, we should see around 20 carriers per arm. Well, it's not powered for this. If it does show even more robust effect, another strategy that -- may want to adapt is some kind of selection or stratification based on this common polymorphism in the next study. I think those are discussion that between now and when study reads, we will have and plans we'll make. But there's absolutely no guidance from all that if we miss on the primary, they don't continue to develop TV-4570. They like the product. There are obviously other forms of neuropathic pain that are of interest. There's a stratification strategy that could build interest with this polymorphism and so, a lot of discussion around this will need to be had and we would hope that they would look at the data – which I think they will – and make the decision based on that.

Okay, understood. And related to the polymorphism, for the Genentech compounds, will they also look at the R1150W genotype in the Phase 2 study?

We can't comment at this point on the Phase 2 design study, Hugo. We haven't got any final and final form for communication. I think all I can say at this point is we're going to have to wait until they give us the green light to communicate and we'll hopefully be able to communicate as fully as we'd like. But to this point, we can't make a comment on that question, apologies.

Oh, okay. Got it. Just quickly on acne, any reason for the slight delay to Q1? Did it have to do with enrollment?

In terms of any -- and you just said that again…

I'm sorry, just any reason for the slight delay from Q4 to Q1?

It's just an enrollment issue. I think we now are at a much better point and the study being a number of months in where we've got a predictable line. The first few months, it's always difficult following the requirements lines, the sites are coming on and off, new sites are opening and non-performing sites are getting closed and you reach a point in the study where you can just get a predict based on a few months history. And I think we're at that point now. So I think we're starting to see a trend line that's looking consistent. So we're comfortable where we are today in this guidance, it's a small shift in our guidance but there is no reasons other than the complexity of study, recruitment and sites opening that has caused the slight delay. We're actually very pleased without the studies going otherwise, we're very pleased.

Okay, great. Thanks for taking my questions guys.

Thank you. And I'm currently showing no further questions from our phone lines. I will now like to turn the conference back over to Jodi Regts for any closing remarks.

Thanks everyone for joining us today. We look forward to keeping you informed of our progress throughout the year. Crystal, we'll now end the call.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.