Xenon staff showed their support on Purple Day (March 26), which aims to raise awareness of epilepsy worldwide
Shareholders are waiting expectantly for results of a Phase II trial on epilepsy patients to be released later this year
The stock: B.C.’s biotech sector has had a breakthrough year, what with the blockbuster IPO of AbCellera Biologics (NASDAQ:ABCL) in December, U.S. regulatory approval for Aurinia Pharmaceuticals (TSX:AUP) in January and other milestones. Next to those, the nearly 30-percent appreciation of Burnaby-based Xenon Pharmaceuticals (TSX, NASDAQ:XENE) year-to-date—doubling to $19 from a low of $9.49 last October—has gone largely unnoticed.
The drivers: Xenon, which has been around since 1996, has focused on treatments for neurological disorders such as epilepsy for the past four years. The most advanced of these, going by the melodic moniker XEN1101, is a more refined version of a drug originally developed by GlaxoSmithKline (LSE, NYSE:GSK). Now in Phase II trials, it’s so far showing none of the unpleasant side effects that caused GSK to pull its version off the market.
Results of the trial are expected by September; because only two out of three patients respond well to existing epilepsy drugs, there’s a significant market opportunity. Plus, Xenon plans to test XEN1101 for treating major depressive disorder.
President Ian Mortimer will soon take over as CEO of the 129-employee company from co-founder Simon Pimstone, who moves upstairs to the role of executive chair, but the orderly nature of the succession suggests strategic continuity. If the XEN1101 trial results later this year come up positive, the drug could be approved for sale as early as 2024.
Word on the street: “We believe this is a really promising drug with a high probability of success,” says Antonia Borovina, an analyst with Bloom, Burton & Co. in Toronto, who has a $27 target on the stock. “What we like is drugs that have a unique mechanism of action and a strong scientific and clinical rationale. We think this drug, XEN1101, has both.”
Coming and going: Shareholders of Vancouver-headquartered cannabis grower Zenabis Global (TSX:ZENA) voted 98 percent in favour of a resolution to be acquired by Ottawa-based Hexo Corp. (TSX, NYSE:HEXO) in an all-stock, $235-million transaction first proposed in February. The deal, part of a wave of consolidation in the pot sector, is expected to close June 1.