Xenon Pharmaceuticals Announces Initiation of XEN801 Phase 1 Clinical Trial

September 24, 2015 – Xenon Pharmaceuticals Inc.

Phase 2 in Acne Patients Expected to be Initiated by Year-End
BURNABY, British Columbia, September 24, 2015 — Xenon Pharmaceuticals Inc. (Nasdaq: XENE), a clinical-stage biopharmaceutical company, today announced the initiation of a Phase 1 clinical trial of its lead proprietary program, XEN801, as a potential treatment for acne. The Clinical Trial Application (CTA) for XEN801 was accepted by Health Canada and the first patient has been dosed in the Phase 1 clinical trial. If supported by positive data from the Phase 1 trial, the Company plans to initiate a proof-of-concept Phase 2 trial in patients with moderate-to-severe acne by the end of the year with data expected in 2016. XEN801 is a novel, topically administered, selective, small molecule inhibitor of stearyl Co-A desaturase (SCD1), an enzyme involved in lipid synthesis that is expressed in sebaceous glands in the skin.

Dr. Simon Pimstone, Xenon’s President and Chief Executive Officer, commented: “Initiating clinical development of XEN801 is a major milestone in advancing Xenon’s proprietary pipeline. We believe that the dual mechanism SCD1 inhibitory activity of XEN801 may be especially promising in treating acne by targeting both the reduction of the size and number of sebaceous glands as well as sebum production. In addition, because of the serious side effects that often limit the use of currently approved retinoid treatments, topically applied XEN801 may represent a novel and safer approach. As 2015 progresses, we intend to continue to advance our partnered and proprietary pipeline programs, and leverage the potential of our Extreme Genetics discovery platform and expertise in ion channel target discovery. We anticipate continued progress across our product candidate pipeline, and believe that its diversity in therapeutic indications and stages of development is a major strength.”

About XEN801
XEN801 is a topically administered, selective, small molecule inhibitor of stearyl Co-A desaturase (SCD1), an enzyme involved in lipid synthesis that is expressed in sebaceous glands in the skin. Xenon believes that XEN801 can have an impact on acne via two distinct mechanisms – firstly, by reducing monounsaturated fatty acids to reduce the production of sebum lipids produced by sebaceous glands, and secondly, by inhibiting SCD1 and increasing the production of retinoic acid endogenously which can have an apoptotic effect on the cells of the sebaceous glands. Xenon has tested this mechanism in human sebocyte cell lines, and demonstrated an ability to increase levels of neutrophil gelatinase-associated lipocalin, or NGAL, a protein that mediates sebocyte apoptosis (cell death). NGAL is increased through retinoic acid signaling. Xenon believes these data support a differentiated mechanism of XEN801 compared to other drugs that are approved or are in development for acne.

Phase 1 and Phase 2 Trial Designs
The Phase 1 clinical trial of XEN801 is designed to enroll up to 3 cohorts of 12 healthy subjects per cohort dosed in a 14-day or 21-day treatment period.  The objectives of Phase 1 are to determine safety and tolerability as well as to determine XEN801’s systemic and skin exposure.

If supported by positive data from the Phase 1 trial, the Phase 2 clinical trial of XEN801 will evaluate the efficacy, safety, tolerability and systemic exposure of XEN801 in approximately 150 patients with moderate-to-severe facial acne.  The trial is designed as a randomized, multi-center, double-blind, vehicle-controlled (topical gel without active pharmaceutical ingredient), parallel-group design.  Subjects will apply XEN801 topically to their face for 12-weeks with a 4-week follow up.  The primary efficacy endpoint is the percent change in total (inflammatory and non-inflammatory) lesion count from baseline to week 12.  Secondary endpoints include the percent change in inflammatory and/or non-inflammatory lesions at different time points throughout the 12 week study as well as a number of Investigator’s Global Assessment (IGAs) measures.

About Acne
Acne is a multifactorial disease of the pilosebaceous unit, which are skin structures consisting of a hair follicle and its associated sebaceous gland. Increased levels of androgens, such as testosterone, which occurs during puberty, cause an enlargement of the sebaceous gland that increases the amount of sebum, a naturally occurring oil, production. Acne develops as a result of blockages in the hair follicles due to the sebaceous glands becoming clogged with excess sebum and dead skin cells. Under these conditions, the bacteria proprionibacterium acnes can multiply and cause the noticeable inflammatory lesions.

Acne prevalence peaks in late adolescence and is estimated to affect 40 to 50 million people in the U.S, of which there are approximately 11 million and 1.2 million individuals with moderate and severe acne, respectively. Milder forms of acne are normally treated with over-the-counter products, such as those containing benzoyl peroxide; moderate and severe forms of acne are often treated with the prescription drug isotretinoin. Isotretinoin is effective with the majority of patients reporting an improvement and approximately 50% of patients reporting remission of their acne. Scientific studies have shown that isotretinoin can cause apoptosis in sebaceous glands thereby reducing sebum production. Isotretinoin treatment has been associated with side effects including thin and dry skin, hair loss, severe acne flares, blood lipid and liver enzyme elevations. However, the most significant adverse event of isotretinoin is birth defects if taken by women during pregnancy or even a short time before conception due to its teratogenic potential.

About Xenon Pharmaceuticals Inc.
Xenon is a clinical-stage biopharmaceutical company discovering and developing a pipeline of differentiated therapeutics for orphan indications that it intends to commercialize on its own and for larger market indications that the company intends to partner with global pharmaceutical companies. Xenon has built a core enabling discovery platform, referred to as Extreme Genetics®, for the discovery of validated drug targets by studying rare human diseases with extreme traits, including diseases caused by mutations in ion channels, known as channelopathies. Xenon’s Extreme Genetics® platform has yielded the first approved gene therapy product in the European Union and a broad development pipeline and multiple pharmaceutical partnerships, including with Teva and Genentech. For more information, please visit www.xenon-pharma.com.

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. These forward-looking statements are not based on historical fact, and include statements regarding the initiation and design of a Phase 2 clinical trial of XEN801 by the end of 2015 if supported by positive data from the Phase 1 trial, potential efficacy, future development plans and commercial potential of our product candidates, including XEN801, the progress and potential of ongoing development programs,  the timing of the results from clinical trials and the plans of our collaboration partners. These forward-looking statements are based on current assumptions that involve risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties, many of which are beyond our control, include, but are not limited to: clinical trials may not demonstrate safety and efficacy of any of our or our collaborators’ product candidates; our Extreme Genetics® discovery platform or ongoing collaborations may not yield additional product candidates; any of our or our collaborators’ product candidates may fail in development, may not receive required regulatory approvals, or may be delayed to a point where they are not commercially viable; we may not achieve additional milestones pursuant to our collaboration agreements; the impact of competition; adverse conditions in the general domestic and global economic markets; as well as the other risks identified in our filings with the Securities and Exchange Commission and the securities commissions in British Columbia, Alberta and Ontario. These forward-looking statements speak only as of the date hereof and we assume no obligation to update these forward-looking statements, and readers are cautioned not to place undue reliance on such forward-looking statements.

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