Neurocrine Biosciences has agreed to exclusively license and co-develop Xenon Pharmaceuticals’ Phase I epilepsy candidate XEN901 as a treatment for children—as well as develop three preclinical compounds, the companies said today—through a collaboration that could generate up-to-$1.7-billion for Xenon.
XEN901 is designed as a highly selective Nav1.6 sodium channel inhibitor being developed to treat children with SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other potential indications, including adult focal epilepsy. Xenon has completed a Phase I trial of a powder-in-capsule formulation of XEN901 in healthy adults.
However, Xenon has also developed a pediatric-specific, granule formulation of XEN901, and has completed juvenile toxicology studies intended to support pediatric development of the drug candidate.
“With its proven expertise in developing and commercializing treatments for neurological disorders, we believe Neurocrine Biosciences is an ideal partner to maximize the potential value of XEN901 for patients,” Xenon CEO Simon Pimstone, MD, PhD, FRCPC, said in a statement.
Neurocrine Biosciences said it anticipates filing an IND application with the FDA in mid-2020 with the aim of launching a clinical trial for XEN901 in SCN8A-DEE patients.
“The agreement with Xenon strengthens Neurocrine Biosciences’ diverse and growing pipeline and reinforces our long-term commitment of becoming a leading neuroscience-focused biopharmaceutical company,” stated Neurocrine Biosciences CEO Kevin Gorman, PhD.
Neurocrine’s developmental pipeline is led by two treatments for which NDAs are under review by the FDA:
- Opicapone, a once-daily, peripherally-acting, selective COMT inhibitor co-developed with BIAL as adjunct therapy to levodopa/DOPA decarboxylase inhibitors in Parkinson’s disease patients, and approved in Europe under the name Ongentys®.
- Elagolix, an oral gonadotropin-releasing hormone (GnRH) antagonist co-developed with AbbVie for the management of heavy menstrual bleeding associated with uterine fibroids in women.
Three preclinical compounds
Under its latest agreement, Neurocrine Biosciences will also gain an exclusive license from Xenon to three preclinical compounds for development against neurological disorders, including selective Nav1.6 inhibitors and dual Nav1.2/1.6 inhibitors. The agreement also includes a multi-year research collaboration to discover, identify, and develop additional novel Nav1.6 and Nav1.2/1.6 inhibitors.
Neurocrine Biosciences has agreed to oversee development costs associated with the programs, as well as pay Xenon $50 million upfront, consisting of $30 million cash and a $20 million equity investment in Xenon stock at a share price of $14.196—20% above Xenon’s closing share price Friday of $11.83.
Shares of Xenon rose nearly 1% in early trading today, to $11.90 as of 10:10 a.m., after jumping as much as 23% in premarket trading.
Neurocrine Biosciences also agreed to pay Xenon up to $25 million upon FDA acceptance of an IND for XEN901—with 55% of that amount ($13.75 million) in the form of an equity investment in Xenon at a 15% premium to Xenon’s 30-day trailing volume weighted average price at that time.
The companies’ agreement also calls for Neurocrine Biosciences to pay Xenon up to approximately $1.7 billion in additional development, regulatory, and commercial milestone payments related to XEN901 and other licensed Nav1.6 or Nav1.2/1.6 inhibitor products—plus a tiered royalty ranging from the low double-digits to mid-teen percentage in the U.S., and a tiered royalty at slightly lower rates outside the U.S. based upon aggregate global net sales.
Beyond XEN901, Xenon would receive tiered royalties from Neurocrine Biosciences for the other Nav1.6 and Nav1.2/1.6 inhibitor products. Those royalties would range from the mid-single to low double-digits in the U.S., and a tiered royalty at slightly lower rates outside the U.S. based upon aggregate global net sales.
Neurocrine Biosciences also agreed to fund all clinical development costs associated with the development of product candidates under the collaboration, subject to Xenon’s “co-fund” option—as well as fund a research collaboration up to three years with a minimum of 10 full-time equivalents at Xenon.
Under the co-fund option, Xenon could co-fund 50% of the U.S. development costs of XEN901 or another product candidate in exchange for increased U.S. royalties, reaching 20% of U.S. net sales at the highest royalty tier for XEN901.
Xenon has agreed in return to oversee specified preclinical costs and a portion of certain near-term manufacturing costs.
“This collaboration represents a significant investment in XEN901 and Xenon’s earlier-stage Nav1.6 and Nav1.2/1.6 inhibitor programs and allows for a broader development of these promising compounds than we could accomplish independently,” Pimstone added. “Furthermore, the additional capital from this transaction will support our efforts to advance and expand our proprietary pipeline.”
Xenon’s pipeline is led by two epilepsy treatments, the Kv7 potassium channel modulator XEN496 (ezogabine), which has received the FDA’s orphan drug designation (ODD) as a treatment for KCNQ2 epilepsy; and the next-generation Kv7 potassium channel modulator XEN1101, which according to Xenon is chemically designed to improve upon the potency, selectivity, and pharmacokinetics of XEN496.
Xenon said last month it expects to file an IND application in the first quarter of 2020 to initiate a Phase III trial of XEN496 in KCNQ2 epilepsy. XEN1011 is under study in a Phase IIb clinical trial now enrolling adult patients with focal epilepsy, after generating positive Phase I and Phase Ib transcranial magnetic stimulation (TMS) data.