Good day, ladies and gentlemen, and welcome to the Xenon Pharmaceuticals' Fiscal Year 2017 Earnings 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 be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Jodi Regts. Ms. Regts you may begin.

Thank you. Good afternoon. Thank you for joining us on our call and webcast to discuss our financial and operating results for the year ended December 31st, 2017. Joining me on today's call are 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. 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; our expectations regarding the sufficiency of our cash to fund operations into mid-2019, the timing of IND or IND equivalent submissions with regulatory agencies; the initiation of future clinical trials, the potential efficacy, future development plans and commercial potential of our and our collaborators product candidate, the timing as and results from ongoing clinical trials and pre-clinical development activities, our ability to achieve certain milestones in both our proprietary and partner development programs, the plans of our collaboration partners and their interactions with regulatory agencies, the results of our research and development efforts, the anticipated termination of our collaboration agreement with Teva, along with the anticipated receipt of the exempted release order from the Ontario Securities Commission, the effectiveness of the transfer and assignment of 1 million commons shares of Xenon to us by Teva, 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 2017 results and the accompanying Annual Report on Form 10-K will be made available under the Investors section of our website at www.xenon-pharma.com and filed with the SEC and on SEDAR. Now, I'd like to turn the call over to Simon.

Many thanks Jody and good afternoon everyone. I'll start with some overall perspective on 2017, focusing on our proprietary CNS-focused product candidates and our prospects for 2018, and then provide some additional color on our treatments-to-date and anticipated milestones for the near future. The last six months have been a period of important focus for Xenon and we've made excellent recent clinical progress with our product candidates. Our neurology-focused development pipeline is at a very exciting juncture with key milestone events over the next three to six months. XEN1101 and XEN901, our two proprietress epilepsy products that are currently in clinical development. Both have unique mechanisms of action and we believe they have a number of additional attractive properties that could represent important therapeutic advances and differentiation from existing anti-epileptic drugs. In addition, today, we're very excited to announce the addition to our pipeline of a novel neurology-focused ion channel inhibitor XEN007, a CNS acting calcium channel modulator believed to be without cardiovascular effects, containing the active ingredient flunarizine. We have received FDA orphan-drug designation for XEN007 for the treatment of hemiplegic migraine, a rare and severe form of migraine with a strong heritable components. To potentially expedite the development of XEN007, we have entered into certain agreements that provide us with access to clinical and regulatory data and manufacturing support, which may allow us to advance this product candidate either on our own or in partnership directly into a Phase 2 clinical trial which we believe could start in 2018. Now, I would like to provide more color on our achievements and anticipated milestones in our proprietary CNS-focused development programs. We are very pleased with our progress in advancing XEN1101, a Kv7.2 potassium channel opener being developed for the treatment of epilepsy, including treatment-resistant adults and pediatric focal seizures,…

Thanks Simon. I'll provide some high level comments on our 2017 year-end financial statements and I'll also provide some details on our announcement today on the termination of our license agreement with Teva and the anticipated cancellation of 1 million XEN common shares. So, starting with our financials, cash and cash equivalents and marketable securities as of December 31st, 2017 were $43.7 million and this compares to $64.1 million as of December 31st, 2016. As revenue was not material for the year ended December 31st, 2017, I'll focus my income statement comments on expenses. Research and development expenses for the year ended December 31st, 2017 were $25.6 million, this compares to $19.8 million for the same period in 2016. The increase of $5.7 million was primarily attributable to spending on XEN1101 which was acquired in April 2017 as well as increase spending on preclinical discovery and other internal programs as well as on XEN901. This was partially offset by a decrease in XEN801 expenses, a candidate that is no longer being developed as well as a decrease in collaboration expenses. General and administrative expenses for the year ended December 31st, 2017 were $7.3 million compared to $6.8 million for the same period in 2016. The increase of $0.5 million is primarily attributable to increased costs for business development activities and salaries and benefits. Other income for the year ended December 31st, 2017 was $1.9 million and did not change significantly as compared to $1.8 million for the same period in 2016. So, overall, the net loss for the year ended December 31st, 2017, $30.7 million compared to $23.0 million for the same period in 2016. The change is primarily attributable to lower revenue, higher R&D expenses, as well as higher G&A expenses. We continue to prudently manage our cash resources…

Thank you. [Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. Your line is now open.

Hi, good afternoon and congrats on the updated. So, to start, I'm wondering for the eight patients that you mentioned have completed the study; do you have all the data from these patients? Are you still accumulating data? And then were there any positive or negative gating factors that allowed you to continue testing the additional 15 patients? And if so, can you discuss some of those?

Yes, Maury its Simon. Obviously, anticipated a question like this would be of interest. We have most of the data from that pilot study. We haven't fully QAed and QCed the study and so we really aren't in a position today to be able to disclose the data. But obviously, this -- the data we got was informative for us and allowed us to model and optimize the crossover study that was then initiated and we've already started that dosing as indicated. So, we're very excited by the program. We're very excited by the study. We think it's a very interesting pharmacodynamic read-out relevant because of what was seen and published on ezogabine, so direct mechanistic relevance to the potassium channel mechanism. And -- but I just want to be cautious at this point, this is not a QA, QCed data and we'll -- we'd prefer to announce that data once that database is fully lots and cleaned, which will be over the coming weeks. And we chose to announce it at a very important epilepsy meeting thereafter in Madrid.

Got it, very good. And for the -- when you present data in May, will we be able to benchmark to historical ezogabine data that's out there? And I guess what are some of the measures that we would be able to compare to what the historical ezogabine data; I've seeing some data on resting motor threshold and active motor threshold.

The answer Maury is yes, we'll be able to report on exactly what was reported in the [Indiscernible] paper which was a 2016 reference on ezogabine reminding you that ezogabine was tested at a single dose at 400 milligrams. This was the highest dose for ezogabine. You may recall the paradigm was that TID dosing regimen for the drug, 400 milligrams TID was the highest dose associated with quite significant AEs. So, we think we'll have much lower doses, but we'll have to -- we will be able to compare directly with ezogabine and using the resting motor threshold. We also will be monitoring and measuring the effects of the drug on the EEG parameters as well as, as most motor threshold. So, we will have an expanded report compared to what was initially reported with ezogabine. If you go to the literature, EEG was measured with a number of other anti-epileptic drugs actually including sodium channel modulators like lacosamide and lamotrigine. And so there's quite a literature now on both EMG with ezogabine, same mechanism as 1101, but also EEG measures with other anti-epileptic drugs and we'll be able to compare and contrast what we see with other drugs in the literature.

Got it, that's helpful. And you mentioned the 400 mg dose for ezogabine and I think some of the non-human primate data out there for 1101 [Indiscernible] and that's for the prior 1101 data? And if you can comment on the dose range that you could be looking for with 1101?

Yes, we can't make a speculation as to what the likely predicted dose will be for Phase 2 going forward. Our prediction going into the study which we're very hopeful for is that 1101 hasn’t affected about one-tenth of the dose that ezogabine has across multiple different in-vivo models. And so obviously, they will be interested looking out TMS study based on doses we use whether we see similar effects at lower doses than was observed in ezogabine, of course that would be in keeping with what our predictions would be based on the in-vivo data, but we can't speculate at this point. Yes, I think the other issue is just around we will be updating where we are with exposure in the Phase 1 study. So, it won't just be TMS, we'll also have a good sense based on our dosage for 1101 what the human PK looks like relative to what was observed with ezogabine. And we'll try and have a bit of a PK, PD understanding. Although, the numbers are fairly small in the pilot study, whereas in the crossover, it's a single dose that has been selected and these individuals are either treated on active or drug with a single dose -- sorry active or placebo. They then washed out and then they crossed over into the other arm. And just to remind you these are volunteers subjects, these are not patients.

Got it. Thank you. And last question is on XEN007, sounds very interesting. The question is do you have IP around this molecule or flunarizine or is there any licensing agreement with Janssen or other IP holders? And then for flunarizine being the active ingredient in 007; is there something else in the drug that may improve the drug's function?

Yes, so quite a few questions there. We are looking obviously at an orphan protection strategy for an orphan indication for flunarizine in the U.S. We have some other ideas about IP. I don't want to disclose those on -- today, but we certainly are looking at other mechanisms and ways to protect the drug from a ongoing lifecycle management perspective. We've got some good ideas which we think will play out. We have entered into license agreements which provide us with exclusive access to cross-reference regulatory and clinical data. So, we have a very good position on that. The reason to do that is obviously to try and limit the amount of preclinical and early clinical work that would need to be done. We're able to cross-reference a very large body of clinical and regulatory data in the rest of world. We have an exclusive position on that cross referencing. We also have an exclusive manufacturing arrangement, although, it maybe that's protective because the drug can be manufactured in different ways, at least by different folks. But we do have -- at least, we put in place, I think, a lot of protections. The orphan strategy would be the focus going in seven years plus six months will be any pediatric extension and that we are looking at other IP routes that may actually provide long -- even longer term intellectual property protection. We just don't want to go into that detail at this point.

Sure, makes sense. Okay, great. Thank you very much.

Pleasure.

Thank you. Our next question comes from the line of Stephen Willey of Stifel. Your line is now open.

Hi, this is still Philomena Kamya in for Stephen Willey. Thanks for taking our questions. I just have a couple of questions on the data that we're going to receive in May. So, this is the -- we're going to be receiving TMS data from the eight healthy subjects, that's correct? Just from the eight healthy subjects?

That's correct. You're also going to be receiving an overview of the Phase 1 study interim. And just to explain the reasons we've run an initial cohort in a powder and capsule formulation, we have a solid dosage form being developed which will be added into the Phase 1. But we're going to be reporting on the powder and capsule formulation in the first form of the Phase 1.

So, yes. Philomena the way to think about it is we've -- it's all under one protocol, but there's a Phase 1a and 1b component and this is an interim read on the 1a. So, in addition to the eight subjects that have gone through a pilot TMS study, there were 42 subjects where we'll have data on PK safety and tolerability. So, in terms of drug exposure in PK and trying to look at therapeutic index, we'll be able to have that data analyzed and presented in May as well. And then the eight subjects on the on the pilot TMS is really informed us on the design of the 1b component, which Simon, kind of, reviewed in detail that this is double-blind placebo-control 15 healthy subjects that's ongoing right now. So, that data won't be available by May, it but will be available a little bit later this year.

Perfect. And in terms of running the parallel clinical trials in the pediatric population, so this will be in parallel to the Phase 2 -- potentially the Phase 2 trial for 1101, correct?

You mean the parallel pediatric or the -- you're referring to -- you're not referring to the TMS now, you're talking about a different parallel pediatric program from the adult program?

That is correct.

Yes. I mean Philomena we're finalizing our Phase 2 plans. I would say at this point, we don't have it finally and we expect over the coming weeks or a couple of months, we'll have that done. There are a few ways we can go with this based on the mechanism. Of course ezogabine, the first generation product, was approved in adult focal seizures. It's the largest number of patients. There's probably 0.5 million refractory focal seizure patients adults in the U.S., probably 50,000 to 100,000 pediatric adolescents with refractory focal seizures. And we have a solid dosage form that formulation-wise is already well-suited. Of course the other options for us which we're exploring might be an orphan strategy and probably top of that list would be Lennox-Gastaut syndrome. This is a complex epilepsy phenotype, but it's a very interesting one, more common in Dravet, less common in focal seizures. It's about 45% of childhood epilepsy. These are patients that present with a complex of seizures, tonic seizures, atonic seizures that quite substantial intellectual developmental delay and impairment. But it's a very interesting model because it's an orphan form of epilepsy, but it occurs both in childhood as well as in adults. And so the potential to do the traditional step-down approach could be taken with an orphan strategy like Lennox-Gastaut with it, by the way, is a very high unmet medical need. So, these individuals are very poorly treated with the existing AEDs. The third strategy and you can see this is complex, but the strategy is a truly ultra-orphan strategy where we focus on these infant epilepsies such as EIEE7, which is the loss of function in this particular sodium channel, KCNQ2 gene mutations and this drug modulates the m-current [ph]; regulates this particular channel. It may be…

Okay, perfect. And if I could just squeeze in one more question about the preclinical work on the potentiator. So, if I heard correctly, it's a Nav1.7, Nav1.72 dual acing compound--

1.6, 1.2 dual acting.

1.6?

Yes.

Okay, perfect. Thank you for the clarification.

Yes. No problem. That's a backup program. As I alluded to we've got a number of backup activities, that's one. We have a Nav1.1 potentiator. And we're guiding at this point that we do expect development candidates to come out of that work over the 2018, 2019 period.

Perfect. Thank you for taking our questions.

Not at all.

Thank you. Our next question comes from the line of David Martin of Bloom Burton. Your line is now open.

Hi there. Its [Indiscernible] on for David. Just a couple questions. First related to the flunarizine, the XEN007 program. If you can maybe give us a bit more information on the history of the drug, why was it not approved in the U.S.? And then do have license -- an exclusive license on the data or not?

Yes. So, I'll answer the second question first. We have an exclusive license to reference the data for U.S. development. On the second question, probably a bit more complicated. We think it's -- so this drug is being around now for -- actually a few decades. It was developed by Janssen, trade name as Sibelium worldwide. It's been generic for a number of years and we think that the reason this drug is never coming to the U.S. is precisely because it has been a generic compound in rest of world. And we think that really no one has considered an orphan strategy for the product. When you go to the literature, we thing hemiplegic migraine is a distinct syndrome. It's got genetic etiologies. Unlike common migraine, it's much more severe. These patients have hemiplegic attacks. They have motor weakness, they have sensory abnormalities. It's one of the complex forms of migraine that its own distinct entity and there's a fair bit of data now in the -- and actually it has its own ICD code as well. There's quite a bit of data in the literature including case reports as well as a observational study reported on 13 hemiplegic migraine patients showing a significant effect of the drug in reducing the frequency of hemiplegic attacks in these subjects. Now, there's never been a controlled randomized study done. So, just put some caution around it, but actually quite a lot in the literature around the use of flunarizine and in patients with hemiplegic migraine. Interestingly, there is a fairly wide use in the U.S. for patients with hemiplegic migraine of a drug known as verapamil, which is a calcium channel blocker. The problem is it's a cardiac calcium channel blocker, it's used off-label, no drug has been tested in HM, but the calcium channel mechanism is validated through the genetics of the disorder and the fact that flunarizine is used in these patients in the rest of the world for hemiplegic migraine is most the first-line treatment and in the U.S., the majority of patients with hemiplegic migraine are on verapamil, the calcium channel blocker which is a cardiac acting inhibitor. flunarizine, as we've already stated, does not have cardiac potentiation. It’s a CNS-acting Cav2.1 inhibitor, we think very well-suited to this orphan indication. But the reason this hasn't been developed is I don't think anyone has thought about an orphan strategy such as hemiplegic migraine for the drug.

Okay. And in terms of target Cav1.2, are there any other companies developing compound targeting for migraine or any other application?

Not to our knowledge. Not to our knowledge.

Okay. Thanks.

Thank you. I'm showing no further questions at this time. I would like to turn the call back to Jodi for closing remarks.

Thank you for joining us today. We look forward to providing updates on our progress. Operator, we will now end the call.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes today's program. You may now disconnect. Everyone have a great day.