Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Xenon Pharmaceuticals Incorporated Second Quarter 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 follow at that time. [Operator Instructions]. As a reminder, this conference call is being recorded. I would like to introduce your host for today's presentation, Ms. Jodi Regts. Ma'am, please begin.

Thanks, Howard. Good afternoon. Thank you for joining us on our call and webcast to discuss our financial and operating results for the second quarter ended June 30, 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 2019, the timing of IND or IND equivalent submissions with regulatory agencies; the initiation of 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, support of our collaboration partners and their interactions with regulatory agencies, the results of our 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 2017 results and the accompanying Quarterly Report on Form 10-Q 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.

Thank you, Jodi, and good afternoon, everyone and thank you all for joining us on this webcast. Today, I'll provide an overview of our progress as we drive towards exciting milestones for the remainder of 2017, and into early 2018. Our goal remains squarely on building a robust pipeline of new focused ion channel modulators of highly validated drug targets via our own internal research efforts as well as through in-licensing or acquisition of other product candidates that complement our existing portfolio. Turning first to the proprietary products within our pipeline, we have focused on developing novel epileptic drugs for rare often as well as larger market indications. We believe that epilepsy is a therapeutic area very well suited to Xenon's ion channel small molecule strategy. Ion channel modulators have already proven themselves as effective agents used in the treatment of various forms of epilepsy. These agents have been limited by narrow therapeutic windows because of the lack of target selectivity and we believe we can improve significantly on this target selectivity. XEN1101 is we believe a very promising anti-epileptic drug or AED that is an innovative next-generation Kv7 potassium channel opener. We expanded our epilepsy pipeline through an acquisition of XEN1101 in Q2. The deal terms for this product were very favorable with limited upfront and near-term costs to us and then regulatory and sales based milestones that are more back end loaded with mid-to-high-single-digit royalties owed by us on commercial sales. XEN1101 has been developed as a potential best in class next generation potassium channel modulator as a fast follower to the first generation product Ezogabine which was approved in 2011 for the treatment of adult onset focal partial seizures. Based on significant pre-clinical work conducted to-date, we believe XEN1101 could potentially provide a better safety, tolerability, and…

Thanks, Simon, and good afternoon everyone. I'm going to focus my comments on the key aspects of our second quarter financial results; I’ll focus on current cash position and runway as well as operating expenses. Cash and cash equivalents and marketable securities as of June 30, 2017, were $51.7 million compared to $64.1 million as of December 31, 2016. Based on our current assumptions and this includes fully supporting the planned clinical development of both XEN1101 and XEN901, we anticipate having sufficient cash to fund operations into the first quarter of 2019. And this excludes any revenue generated from existing partnerships or potential new partnering arrangements. As revenue was modest for the quarter, I'll focus my income statement comments on R&D and G&A expenses and other income. Research and development expenses for the quarter were $6.1 million. This compares to $5.1 million for the same period in 2016. The increase of $1 million was primarily attributable to increased spending on our internal pre-clinical and discovery programs, this includes XEN901 and 1101 which as a reminder was acquired in April 2017, and this was partially offset by a decrease in XEN801 expenses and a decrease in collaboration expenses. G&A expenses for the quarter were $1.8 million and this compares to $1.7 million for the same period in 2016. This increase of $0.1 million was primarily attributable to increased costs for business development activities, for salaries and benefits partially offset by the fair value adjustment on liability classified stock options. Other income for the quarter was $0.5 million and this compares to $0.4 million for the same period in 2016. This increase was primarily driven by an increase in unrealized foreign exchange gains arising from the translation of Canadian denominated balances into U.S. dollars. This gives us a net loss for the quarter of $7.4 million compared to $6 million for the same period in 2016. The change is primarily attributable to lower revenue, higher R&D and G&A expenses, partially offset by higher unrealized foreign exchange. For the remainder of 2017 we don't expect our operating expenses to change significantly with the addition of XEN1101. We will be allocating our internal resources from XEN801 to XEN1101 and XEN901 as well as other internal pre-clinical and discovery efforts. And just as a reminder our partner collaboration's are fully funded by Genentech and by Teva. So in summary and to recap Simon's earlier comments, we continue to efficiently and strategically manage our cash and our other resources. And while the past quarter was a challenging one for Xenon, we do look forward to achieving some important milestones in our development programs over the next 12 months. Obviously supported by our cash runway which we believe will extend into the first quarter of 2019. We're building a unique franchise of proprietary neurology products with multiple shots on goal and with partnerships that provide us with additional upside and revenue potential. So now, operator, we'll open the call up for questions.

[Operator Instructions]. Our first question or comment comes from the line of Maury Raycroft from Jefferies. Your line is open.

Hi, thanks for taking my questions. So, good news on the Phase 2 for 0310 starting in 1Q. I'm wondering if you anticipate a standard Phase 2 design for the trial or I guess you can provide any additional context and outlook.

Thanks Maury. Yes, we aren't able to say much about the Phase 2 plans. These are Genentech's obviously proprietary information at this point. I am hopeful that once we get into the phase of development of course we'll be able to talk about the study in much more detail. But we at this point, while we have an understanding of what Genentech wants to do, we are under a confidentiality obligation as part of our agreement with them and just are not able to disclose the nature of the development plans for the compound so, stay tuned but we does not able to say too much at this time.

Got it. And so Ezogabine was supposed to get pulled from the market in June I believe and I just wondering if you had any sort of status update on where the drug is commercially in more patients who have access to the drug.

Yes. Maury we believe that they have stopped supplying. There is likely some supply available. There's been quite a bit of press in the last month or so from patients and patient advocacy groups around the availability of the drug and lack thereof looming and concern about obviously stock supply disappearing. So, our understanding is that, they have stopped supplying pharmacies but pharmacies, some pharmacies may still have product supply available. They have sent out as a doctor letter notifying physicians of the removal of the drug and so, the engine we believe is -- has stopped or is withdrawing supply over the recent few months.

So for patients currently on therapy any idea of what their backup plan.

Yes, not really. There anti-epileptic drugs would have to be shifted once stock runs out but we know that for many of these patients, this drug was extremely useful and they'll have to now depend on other anti-epileptic drugs that are approved. And there's nothing specific other than the known drugs that I think will be tried in a stepwise fashion. Many of these patients are patients that were originally on drugs and have very refractory epilepsy which is difficult to treat and the potassium channel mechanism obviously is a well recognized important one and I think this leaves us very well positioned with 1101 to capture, the what we believe is a very significant area of medical need.

Got it. And then for 1101 you mentioned Tinnitus, Pain, and ALS, as other indications potentially and I was just wondering if one of the indications has a higher priority or maybe a better mechanistic perhaps [ph] now.

Yes, no great question. I think if I had to order them I'd probably put sort of Tinnitus and ALS at the top and Pain following. There has been quite a bit of interesting reports of off label use of Ezogabine and patients with Tinnitus as far as I'm aware in a randomized control trial but quite a lot of interesting anecdotal data. We know that potassium channels are expressed in the hair cells and this is been an interesting target. So, we're thinking about this pretty significantly for the 1101 program. ALS as well, I think well I'm we should be offline can provide some of the mechanism based thinking that there is literature supports the role of this channel in neuronal cells and particularly in patients with ALS. Some work that’s being done in pluripotent stem cells that may suggest that potassium channel modulators could be of benefit. So, again I think both in ALS and Tinnitus, the potassium channel mechanism I think is a very interesting one is data around the mechanism in both these indications and I think both obviously huge areas of opportunity in terms of current treatment gaps in areas of need. So while we're not yet ready for prime time to lay out development strategy for those indications and as we updated the focus initially is clearly to follow on what Ezogabine has done, the path has been very well laid out for us. There is going to be work that we will be adding both pre-clinically and hopefully clinically to test this drug based on the Phase 1 -- outcome of the Phase 1 safety PK to test this drug in other indications which we think could be very well suited.

Okay, great. Thank you.

No problem.

Operator, can you still hear?

We can't hear the operator, just wanted if there are any other questions? Operator?

[Operator Instructions]. Our next question or comment comes from the line of Stephen Willey from Stifel. Your line is open.

Hi this is Philomena Kamya in for Stephen Willey, thanks for taking our questions. With respect to XEN901 can we expect similar PK/PB assessments to be disclosed similar to what would be disclosed to the XEN1101 program?

Yes, thanks Philomena, it’s Simon. Thank you for the question. That is under discussion right now. The -- on the surface of course it looks like it’s an obvious thing to do, we need to make sure that we believe the mechanism is well suited for the TMS readout. We believe the mechanism is well suited for 1101 based on the fact that there was similar work done actually with Ezogabine. So I think the validation of the target ensuring this pharmacodynamic readout for the potassium channel mechanism is there. For the sodium channel mechanism obviously given this is a much differentiated drug than other voltage gauged ion channel modulators 901 to be specific very, very selective for NAV1.6, we need to do a little bit more work now and to decide on whether the TMS is appropriate model to test the mechanism. I'm not suggesting in any way that it isn't. We just haven't done that work, we certainly hope that it will be a model that we can apply and if so we probably have that as in and around the Q2 to mid-year timeframe but we don't yet and we haven’t yet made that decision to add the TMS into the Phase 1 program. We will probably have that decision made by the next call, after Q3 call.

Understood. And if I may just may one modeling question, can we expect further decreases in OpEx as a reflection of some of the cost cutting measures that you alluded to the last after the disclosure of the top-line data from TV-45070?

No it's going to be more of a switch of OpEx from obviously earlier in the year and going back into 2016, there was more spending on our 801 program. As I mentioned in my comments I truly think OpEx for this year is going to be more flat and then if you just look at our cash runway into 20, into the first quarter of 2019 that is adjusted there would be an increase in expenses in 2018 and now would be consistent with both the 1101 and 901 at that time being in clinical development.

Understood. Thank you for taking our questions.

Pleasure.

Thank you. [Operator Instructions]. I'm showing no additional audio questions in the queue at this time. I would like to turn the conference back over to Ms. Jodi Regts for any closing remarks.

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

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