Xenon Q2 Loss Wider Than Expected, Pipeline Development in Focus

Xenon Pharmaceuticals XENE reported a loss of $1.07 per share for the second quarter of 2025, wider than the Zacks Consensus Estimate of a loss of $1.03. The company had incurred a loss of 75 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. The company did not recognize any revenues in the year-ago quarter as well.

XENE, in collaboration with Neurocrine, is currently evaluating NBI-921355, a Nav1.2/1.6 inhibitor, in a phase I study as a potential treatment for certain types of epilepsy. Xenon recently received a $7.5 million milestone payment from Neurocrine in connection with the progress of NBI-921355 into a clinical-stage study.

XENE's Q2 Results in Detail

In the second quarter, research and development (R&D) expenses increased 51% year over year to $75 million. The uptick was primarily due to increased expenses related to the company’s ongoing azetukalner late-stage studies in epilepsy and major depressive disorder (MDD), start-up costs for a phase III bipolar depression (BPD) study of azetukalner, and higher personnel expenses from a larger workforce.

General and administrative expenses totaled $19.2 million in the reported quarter, relatively flat year over year.

Year to date, XENE shares have lost 13% compared with the industry’s decline of 0.7%.

Xenon had cash, cash equivalents and marketable securities worth $624.8 million as of June 30, 2025, compared with $691.1 million as of March 31, 2025. The company expects its existing cash balance to fund its current operating plans, which include the completion of the azetukalner phase III epilepsy studies and supporting late-stage clinical development of azetukalner in MDD and BPD into 2027.

XENE's Pipeline Updates

XENE’s lead pipeline candidate, azetukalner, is in late-stage studies for treating focal 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 early 2026. The X-TOLE3 study is currently enrolling patients and is intended to support potential regulatory submissions for azetukalner for FOS in ex-U.S. jurisdictions.

The company is also evaluating azetukalner for primary generalized tonic-clonic seizures in a phase III X-ACKT study, which is currently enrolling patients.

Xenon has also initiated the first two of three planned phase III clinical studies, X-NOVA2 and X-NOVA3, evaluating azetukalner in patients with MDD and is currently screening patients.

During the second quarter of 2025, XENE initiated the first of two phase III clinical studies, X-CEED, to evaluate azetukalner in patients with BPD I and BPD II depression.

Xenon has initiated two separate early-stage studies evaluating XEN1120 and XEN1701, targeting Kv7 and Nav1.7, respectively, for a range of therapeutic indications.

Xenon Pharmaceuticals Inc. Price, Consensus and EPS Surprise

Xenon Pharmaceuticals Inc. price-consensus-eps-surprise-chart | Xenon Pharmaceuticals Inc. Quote

XENE's Zacks Rank & Stocks to Consider

Xenon currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are CorMedix CRMD and Alvotech ALVO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for CorMedix’s earnings per share have increased from 93 cents to 97 cents for 2025. During the same time, earnings per share estimates for 2026 have increased from $1.64 to $1.65. Year to date, shares of CRMD have rallied 24.1%.

CorMedix’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 34.85%.

In the past 60 days, estimates for Alvotech’s 2025 earnings per share have increased from 17 cents to 18 cents. Earnings per share estimates for 2026 have increased from 81 cents to 83 cents during the same period. ALVO stock has declined 35.6% year to date.

Alvotech’s earnings beat estimates in each of the trailing three reported quarters, delivering an average surprise of 244.18%.

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