From Abandonment To Resurrection: A Look Into Xenon's Phase 3-Ready Drug For KCNQ2-EE



  • Xenon Pharmaceuticals recently announced they will proceed with a pivotal, phase 3 study for their repurposed drug, XEN496, in KCNQ2-EE
  • The repurposing of retigabine, along with the development of other anti-epileptic drugs, represented a shift in company focus following two major trial failures in 2015 (pain) and 2017 (acne)
  • Backed with solid clinical rationale and historical, off-label use of retigabine for KCNQ2-EE, XEN496 provides the company with a phase 3-ready drug that is likely to succeed in the clinic and on the market
  • Conservative estimates have XEN496 achieving upwards of $150M in peak annual revenue for KCNQ2-EE with market exclusivity locked for seven years due to Orphan Drug Designation achievement 

Xenon Pharmaceuticals (XENE) has been around for nearly two decades and has little to show for. Following their most recent failure in 2017 in moderate-to-severe acne, the company was, surely, in the midst of an identity crisis. They decided to shift gear, focusing primarily on drug development for epilepsy. In mid-2018, Xenon announced the advent of repurposed retigabine (XEN496), a Kv7 potassium channel modulator, for the treatment of a rare epilepsy of childhood (KCNQ2-EE). Months prior, the previously FDA-approved drug for adult focal seizures was removed from the market due to the addition of a black box warning and the marketing difficulties that followed. During its time on the market, the drug saw off-label use, due to strong rationale for use and the lack of effective treatments, for KCNQ2-EE. Now in Xenon's hands, the FDA appears open to the swift development of the drug, as the company received Orphan Drug Designation (ODD), Fast Track Designation, and word from the FDA that "a single pivotal trial a single pivotal trial in approximately 20 patients may be considered adequate in order to demonstrate XEN496’s efficacy."

The following article provides a review of XEN496's prospects in KCNQ2-EE.

KCNQ2-EE Overview


KCNQ2 epileptic encephalopathy (KCNQ2-EE) is a rare, serious, and genetic epileptic condition that becomes evident within the first few days of life:

(...) some individuals with KCNQ2 mutations have a severe neonatal epileptic encephalopathy. Infants with loss of function KCNQ2 variants present in the first week of life with an abnormal neurologic examination (encephalopathy, hypotonia, and lack of visual attentiveness) and severe, treatment-resistant seizures.


Current treatment utilizes off-label epileptic drugs, most of which act on sodium channels. However, there is strong rationale for addressing potassium channels in KCNQ2-EE.

KCNQ2 mutations may result in a dominant-negative effect on voltage-gated potassium channels, which in a xenopus model system could be partially reversed by retigabine.


KCNQ2 encodes the voltage‐gated potassium channel Kv7.2:

Image Source: Annals of Neurology 

KCNQ2 mediates the "M‐current, a slowly activating, noninactivating potassium conductance that inhibits neuronal excitability." Mutations in KCNQ2 cause neuronal excitability and, subsequently, seizures.

What makes the condition severe, however, are the consequences associated with frequent, treatment-resistant seizures and encephalopathy during a crucial period of human development (early infancy):

KCNQ2 mutations have been identified in severe neonatal EEs associated with intellectual disability and motor impairment, with a burst–suppression EEG pattern or multifocal epileptiform activity, but also milder forms.


Xenon hopes that retigabine, repurposed for children as XEN496, will reduce seizure activity and, possibly, intellectual delays in this difficult-to-treat population.

Historical use of retigabine in KCNQ2-EE

Retigabine specifically acts on KCNQ‐channels and has demonstrated its ability to reverse the effects of the KCNQ-relevant mutations in preclinical studies:

Abstract Source: Annals of Neurology

Researchers hope that reducing seizure activity early in the disease process will attenuate the lifelong developmental delays associated with the condition.

Retigabine acts as an activator of neuronally expressed KCNQ‐channels, thereby reducing neuronal excitability. Patients with a KCNQ2‐mediated epileptic encephalopathy may especially benefit from this targeted therapy, as rapid control of seizures could potentially improve developmental outcome.

Current Opinion in Pharmacology

Retigabine was once approved for adult epilepsy, but was soon removed from the market due to safety concerns that hampered commercial opportunity.

Below is a brief history of the drug:

The company has stated the withdrawal is for commercial reasons, due to very limited use and declining numbers of patients initiating therapy on the drug.

However, in 2013 the US FDA issued a safety communication and placed a black boxed warning on the drug label, related to risks of retinal abnormalities, potential vision loss, and blue discoloration of the skin, nail, mucous membrane, and white-of-the-eye. Whether these changes were reversible was unknown at that time. The FDA also advised all patients taking the medication to have baseline eye exams, followed by periodic eye exams every 6 months.

The FDA later revised its warning in October 2015. Based on its review of additional safety reports, the FDA decided that the retinal pigment changes associated with the drug did not appear to affect vision, and that the skin discoloration appeared to be cosmetic, without serious side effects. However, at that time the FDA required GSK to do a long-term observational study to provide further information on the medication’s safety, and whether retinal pigment changes associated with its use cause vision loss or other long-term effects.

Potiga can also cause urinary retention. Close monitoring is required in patients with benign prostatic hypertrophy, or cognitive impairment, and also in patients taking anticholinergic medications. Other adverse effects may include QT prolongation; dizziness; somnolence; fatigue; and neuropsychiatric symptoms, including confusion, psychotic symptoms, and hallucinations.

Neurology Times

During its time on the market, the drug was used, with reports of success, off-label for KCNQ2-EE, as there are no FDA-approved drugs for the condition and KCNQ2-EE is very resistant to conventional anti-epileptics.

Before the FDA cited potential for vision loss due to retinal pigment changes, ezogabine was studied (Class 4 evidence) in eleven KCNQ2-EE patients. The study concluded that ezogabine is effective in seizure reduction, particularly in children < 6 months of age.

Three of the 4 patients treated at less than 6 months of age were reported to exhibit improvement in seizures and development. These patients had failed multiple standard medication trials (at least 4) including several agents with activity on voltage-gated sodium channels (1 tried phenytoin and all 3 responders tried topiramate previously).

Neurology Genetics

Safety-wise, the drug was relatively well-tolerated with no reports of retinal pigment changes or vision loss:

Dose-related side effects observed included urinary retention, chromaturia, and somnolence, which all have been reported in adults. All resolved with dose modification. Serious adverse side effects, including ophthalmologic and skin pigmentary changes included in the FDA black box warning, were not reported during the follow-up period (mean, 11.5 months; range, 2–24 months). These adverse effects were typically observed after 4 or more years of treatment (...)

Neurology Genetics 


XEN496's active ingredient is retigabine. The company originally intended to initiate a pivotal trial last year but chose, instead, to go forward, first, with an adult PK study after electing to change the drug's formulation into something that is more child-appropriate and allows "flexible weight-based dosing without requiring extemporaneous compounding".

Image Source: Xenon

The study revealed similar pharmacokinetic profiles for XEN496 compared with historical retigabine data.

Xenon reports that the FDA will only require one phase 3 trial in ~40 patients in which the company intends to initiate this year:

The FDA has indicated that it is acceptable to study XEN496 in infants and children up to six years old, and that a single, small pivotal trial may be considered adequate in order to demonstrate XEN496’s efficacy in KCNQ2-DEE, provided the study shows evidence of a clinically meaningful benefit in patients with the intended indication. Based on the FDA’s feedback, Xenon anticipates initiating a randomized, double-blind, placebo-controlled Phase 3 clinical trial to evaluate the clinical efficacy, safety, and tolerability of XEN496 in approximately 40 pediatric patients with KCNQ2-DEE. The primary endpoint is expected to be the median percent change in seizure frequency from baseline compared to treatment period of active versus placebo. The XEN496 Phase 3 clinical trial is expected to be initiated in 2020.


Rationales for clinical acceleration

The FDA's willingness to proceed directly into a pivotal trial is likely due to the following reasons:

  • KCNQ2-EE is a very severe disease with lifelong consequences if improperly controlled
  • KCNQ2-EE is resistant to conventional therapies and is without a FDA-approved drug
  • Retigabine (ezogabine) has already procured robust (p<0.001) anti-seizure data
  • 496's mechanism of action is specific for KNCQ2-EE
  • Given the severity of the condition, the historical side effects (cosmetic & urinary retention) associated with the drug's active ingredient are unlikely to outweigh the benefits of seizure reduction and cognitive improvements
  • It is also likely that the drug will come with a Risk Evaluation and Mitigation Strategy (REMS) program that will allow close monitoring for the potential of adverse events (these patients, already, require very close medical monitoring so this isn't proposed to be a big hinderance for the drug's market potential)
Commercial opportunity

This is a product that Xenon, upon approval, could readily market themselves, as one would anticipate quick uptake given the (1) severity and treatment-resistant properties of the condition, (2) simplified means of genetic profiling, (3) lack of FDA-approved treatments, and (4) absence of developmental treatments for the indication.

Based upon available information on prevalence, one may estimate that there are 2,500 KNCQ2 US & EU patients who would benefit from 496 upon regulatory approval. Priced at $80,000/year, which is conservative compared to other orphan drugs with very limited populations, and assuming strong penetration (75%), this nets $150M/year in peak annual revenue. Because Xenon received ODD, 496 will benefit from, at least, seven years of market exclusivity in the US.

Final thoughts

Resurrection is no easy task in biotechnology, but Xenon's shifting of gears has paid off so far, as evidenced by a sustained increase in market valuation.

Wholly-owned XEN496 provides the company with a phase 3-ready drug that is primed for clinical, regulatory, and market success due to the reasons cited above. Xenon is flush with ~$230M in cash due to price-opportunistic raises and collaborative milestone payments (from Neurocrine Biosciences). With a reasonable market capitalization just under $500M, one would anticipate continued appreciation of XENE. Clover Biotech Research looks forward to providing investors with ongoing coverage and analysis on this promising biotechnology company.

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