By ALLISON GATLIN

Xenon Pharmaceuticals (XENE) stock launched Monday, smashing its previous record high, on "unprecedented" results for its seizure treatment.

The biotech company tested its daily pill, azetukalner, in patients with focal onset seizures. In this condition, partial seizures form in one area of the brain and generally last one to two minutes. A high dose of azetukalner lowered monthly seizures by 53.2% after 12 weeks. The low dose led to a 34.5% reduction. Both outperformed the placebo, which reduced seizures by just 10.4%.

William Blair analyst Myles Minter described the results as "unprecedented."

"This blows away our bull case expectations of (greater than or equal to) 30% placebo-normalized improvement described in our data preview," he said in a report. "Investors were debating if the bar should be 25% or 30% on a placebo-normalized basis and the data clearly blasts through both."

Not only does this set Xenon Pharmaceuticals up well to potentially compete with Praxis Precision Medicines (PRAX) and Rapport Therapeutics (RAPP), it could also put Xenon on the path to an acquisition, analysts said.

Johnson & Johnson (JNJ) spent $14.6 billion to buy neuroscience-focused Intra-Cellular Therapies in 2025. Jazz Pharmaceuticals (JAZZ) bought GW Pharma and its seizure drug for $7.2 billion in 2021.

Xenon Pharmaceuticals shares catapulted 49.6%, closing at 62.76.

What's Next For Xenon?

Xenon is now planning to submit its request for Food and Drug Administration approval in the third quarter. That would put potential approval in mid-2027.

In focal onset seizures, alone, azetukalner could be a $1.4 billion product, at its peak, RBC Capital Markets analyst Brian Abrahams said in a note. But Xenon is also testing its drug in patients with major depressive disorder and bipolar depression. There, he sees a potential for an additional $1.6 billion.

"We would be buyers into potential strength, given the potential to exceed commercial expectations in FOS, potential for (long-term) label expansion into MDD and BPD and potential for today's strong data to catalyze a near-term takeout."

Abrahams gave the results a "gold medal" and kept his outperform rating and 59 price target on Xenon Pharmaceuticals stock.

Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.

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This article was first published on Investor's Business Daily