Unlocking Xenon Pharmaceuticals $1B Potential: Analyst Cites Anti-Epileptic Candidate's Untapped Value

Cantor Fitzgerald has initiated coverage on Xenon Pharmaceuticals Inc XENE with an Overweight rating and a price target of $58. 

The analyst writes that the company’s lead candidate, XEN1101, a Kv7.2/3 potassium ion-channel activator, has a de-risked mechanism of action based on the approval of ezogabine, a Kv7.2-7.5 channel activator.

Retigabine or ezogabine is used as an adjunctive treatment for partial epilepsies. The drug was developed by Bausch Health Companies Inc BHC (formerly Valeant Pharmaceuticals), and GSK Plc GSK

The analyst also writes that positive data presented from the Phase 2b X-TOLE study in focal onset seizures (FOS) clinically de-risks XEN1101 while demonstrating an enhanced safety/ adverse event profile relative to its predecessor, ezogabine. 

Cantor writes that neither the PoS in FOS nor the potential broader use of XEN1101 within epilepsies or psychiatric disorders is fully valued at current trading levels. It foresees increasing visibility in the next 12 months for all three opportunities. 

Even with modest penetration into the FOS population and an annual pricing assumption of ~$22K, we forecast over $1 billion in probability-adjusted sales within five years of the launch. 

Price Action: XENE shares are up 0.99% at $39.65 on the last check Tuesday.