Emerging epilepsy treatment landscape: KOLs see substantial unmet need in epilepsy and constructive potential for differentiated mechanisms across focal epilepsy and DEEs.

Overview

This Goldman Sachs KOL update examines the evolving treatment landscape for focal epilepsy and developmental and epileptic encephalopathies. The physicians described persistent unmet need and saw potential for differentiated therapies, while emphasizing that clinical confirmation, tolerability and access will determine real-world adoption.

Core views

Goldman Sachs hosted two epilepsy physicians to assess focal epilepsy and developmental and epileptic encephalopathies (DEEs). Their starting point was substantial unmet need: only approximately 25-30% of focal-epilepsy patients achieve seizure freedom despite numerous approved therapies, and roughly one-third remain refractory after multiple treatments. This creates interest in novel mechanisms, but the KOLs stressed that real-world tolerability—particularly neuropsychiatric adverse events—will determine whether new agents gain traction among refractory patients. For Rapport Therapeutics' RAP-219, the physicians were constructive on the early clinical efficacy and the TARPy8-selective AMPA-receptor mechanism. One KOL suggested that preferential cerebellar targeting could spare cortical and limbic structures and potentially reduce the anger, irritability, aggression and agitation historically associated with AMPA-targeted treatments such as Fycompa. However, they viewed a larger randomized Phase 3 study as necessary to validate the program. They also expect possible translation from focal-onset seizures to primary generalized tonic-clonic seizures, with Phase 3 initiation planned for 1H27, citing Fycompa's efficacy in both populations as precedent. Ahead of October Phase 2 bipolar-mania data, the KOLs considered psychiatric safety and tolerability an investor focus, though they saw limited direct read-through to focal-onset seizures because the underlying conditions differ. For Xenon's azetukalner, the physicians were enthusiastic about next-generation Kv7/M-channel approaches for refractory focal epilepsy. They cited approximately 50% seizure reduction and a dose response for XENE that compared favorably with existing antiseizure-medication studies. One doctor initially expects use mainly in the third-line-and-beyond setting and would monitor psychiatric or behavioral effects, but did not regard the observed safety profile as materially worse than existing therapies. The two KOLs estimated that interest could extend to one-half to two-thirds of refractory patients; one anticipated treating one-half of such patients in the first year. They saw BHVN's program as mechanistically similar and potentially attractive relative to historical GABAergic or AMPA-based approaches, subject to real-world tolerability. For Jazz's Epidiolex in DEEs, the KOLs said a meaningful share of patients—one physician estimated one-third to one-half—have benefited through seizure reduction, tolerability and possible mood and behavioral calming effects, especially after prior medicines fail. They expect a solid oral capsule to improve convenience versus the current sesame-oil, strawberry-flavored oral liquid, particularly for adults who struggle with volume or taste; one KOL expected the capsule to become the preferred formulation. For Praxis' relutrigine, the physicians viewed EMBOLD data in SCN2A- and SCN8A-DEEs as encouraging and saw potential for the state-dependent sodium-channel mechanism to translate into broader DEE populations in the ongoing Phase 3 EMERALD study. They emphasized that adoption depends on preserving favorable tolerability in the larger trial, and indicated that a more modest placebo-adjusted seizure reduction than in EMBOLD could still support use if tolerability remains strong. The KOLs viewed the state-dependent approach as potentially advantageous from a sodium-channel-toxicity perspective and noted that patients who exhaust existing therapies are receptive to new mechanisms. For Stoke's zorevunersen, the physicians were broadly enthusiastic about antisense oligonucleotide therapies that address underlying biology rather than only suppress seizures. In Dravet syndrome, they saw potential value beyond seizure-frequency reduction through disease modification and improved developmental, cognitive, behavioral and functional outcomes. They considered intrathecal administration acceptable given disease severity and unmet need, while indicating that future therapies with alternative administration routes would be desirable. The report also provides individual valuation frameworks and Buy ratings. JAZZ's $337 12-month target is based entirely on DCF using a 9% WACC and 1% terminal growth rate; Goldman Sachs forecasts 2026/2027/2028 non-GAAP EPS of $23.71/$25.12/$25.67. PRAX's $575 target blends a $554 DCF value at 70% weight, using 13% WACC and 2% terminal growth, with a $625 theoretical M&A value at 30% weight based on 11x 2029E sales. RAPP's $62 target blends a $54 DCF value at 70%, using 19% WACC and 2% terminal growth, with an $81 theoretical M&A value at 30% based on 11x 2031E sales. STOK's $44 target is 85% DCF value of $43, using 14% WACC and 2% terminal growth, plus 15% theoretical M&A value of $47 based on 11x 2029E sales. XENE's $75 target combines an 85% DCF-derived intrinsic value of $71, using 16% WACC and 2% terminal growth, with a 15% theoretical M&A value of $95 based on an 11x multiple of risk-adjusted 2030E sales.

Analysis framework

The report uses a KOL discussion to assess unmet need, mechanisms of action, early efficacy, likely treatment positioning and tolerability barriers across epilepsy programs. It then links the clinical discussion to company-specific valuation approaches, primarily DCF and, for several companies, theoretical M&A values based on forward sales multiples.

Methodology notes

• Industry AnalysisSupply-demand framework

  Unmet-need and treatment-adoption assessment

  The KOL discussion assesses demand for new therapies by examining refractory-patient prevalence, limitations of existing treatments, mechanism differentiation and tolerability barriers.

• Valuation methodsDCF (Discounted Cash Flow)

  Discounted cash flow valuation

  Goldman Sachs derives intrinsic values for JAZZ, PRAX, RAPP, STOK and XENE by discounting projected cash flows using company-specific WACC and terminal-growth assumptions.

• Event-Driven and Behavioral Finance

  Theoretical M&A valuation

  For PRAX, RAPP, STOK and XENE, the report assigns a weighted theoretical acquisition value using an 11x forward-sales multiple.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Jazz Pharmaceuticals (JAZZ)

  Epidiolex remains a meaningful DEE treatment contributor, and an oral capsule could improve adoption through greater convenience.

  Strengths

  One KOL estimated one-third to one-half of patients benefit; the capsule may be preferred over the oral liquid.

  Weaknesses

  Revenue concentration in three leading commercial assets.

  Comparison

  The capsule may be more convenient than the current sesame-oil, strawberry-flavored oral liquid.

  Risks

  Supply constraints, reimbursement or market-access barriers, adverse events, regulatory setbacks and future competition after exclusivity periods.

• Praxis Precision Medicines Inc. (PRAX)

  Relutrigine may become a new option across DEEs if its mechanism and tolerability translate into the Phase 3 EMERALD study.

  Strengths

  State-dependent sodium-channel mechanism may reduce sodium-channel toxicity; KOLs saw unmet need and potential beyond SCN2A and SCN8A DEEs.

  Weaknesses

  Adoption depends on efficacy-tolerability balance in a larger study.

  Comparison

  A more modest placebo-adjusted seizure reduction than EMBOLD could be acceptable if favorable tolerability is maintained.

  Risks

  Regulatory or CRL risk, a restrictive ulixacaltamide label, payer friction in essential tremor, EMERALD failure in broader DEEs, or relsunersen failure in EMBRAVE3.

• Rapport Therapeutics (RAPP)

  RAP-219's selective AMPA mechanism could address focal epilepsy, subject to randomized Phase 3 confirmation.

  Strengths

  KOLs were encouraged by early efficacy and TARPy8 selectivity; selective cerebellar targeting may limit neuropsychiatric effects.

  Weaknesses

  Early evidence requires validation in a larger randomized Phase 3 study.

  Comparison

  The KOLs contrasted its selectivity with historical psychiatric adverse events from AMPA agents such as Fycompa.

  Risks

  Failure to replicate results in Phase 3 focal-onset seizure or Phase 2 bipolar-disorder studies, slow uptake, reimbursement failure, and regulatory, competitive, IP and financing risks.

• Stoke Therapeutics Inc. (STOK)

  Zorevunersen and Stoke's antisense oligonucleotide platform may offer disease modification in Dravet syndrome beyond seizure control.

  Strengths

  Potential to restore gene function upstream of seizure generation and improve developmental and functional outcomes.

  Weaknesses

  Intrathecal administration is acceptable but less desirable than future alternative routes.

  Comparison

  The approach differs from therapies that primarily suppress seizures by targeting underlying biology.

  Risks

  Failure of Phase 3 EMPEROR on seizures or secondary endpoints, payer resistance to Spinraza-like pricing and disease-modification claims, and a smaller or harder-to-access patient population.

• Xenon Pharmaceuticals Inc. (XENE)

  Azetukalner's Kv7 mechanism could gain refractory focal-epilepsy use if efficacy and psychiatric tolerability hold in practice.

  Strengths

  Approximately 50% seizure reduction and dose response; KOLs saw potential use in a substantial share of refractory patients.

  Weaknesses

  Initial use may be confined to third-line-and-beyond patients and requires psychiatric/behavioral monitoring.

  Comparison

  KOLs viewed Kv7 approaches favorably relative to historical GABAergic or AMPA-based therapies.

  Risks

  Phase 3 efficacy or safety may not translate to X-ACKT, X-NOVA2 or later trials; global commercialization may require partners and pipeline replenishment may require in-licensing.

Key data

• Focal-epilepsy seizure freedom~25-30%Share of patients achieving seizure freedom despite numerous approved therapies.
• Refractory focal-epilepsy patients~one-thirdRemain refractory despite taking multiple therapies.
• XENE seizure reduction~50%KOLs cited seizure reduction and dose response for the Kv7 approach.
• Epidiolex patient benefit1/3 to 1/2One KOL's estimate of patients benefiting from seizure reduction, tolerability and other effects.
• JAZZ 2026/2027/2028 non-GAAP EPS$23.71 / $25.12 / $25.67Goldman Sachs estimates.
• JAZZ 12-month target$337100% DCF; 9% WACC and 1% terminal growth.
• PRAX 12-month target$57570% $554 DCF and 30% $625 theoretical M&A value.
• RAPP 12-month target$6270% $54 DCF and 30% $81 theoretical M&A value.
• STOK 12-month target$4485% $43 DCF and 15% $47 theoretical M&A value.
• XENE 12-month target$7585% $71 DCF intrinsic value and 15% $95 theoretical M&A value.

Impact & implications

The KOL feedback supports the report's constructive view that unmet need can create adoption opportunities for differentiated epilepsy programs. The report nevertheless makes clinical validation, durable tolerability, payer access and the ability to translate early results into broader populations central conditions for realizing that opportunity.

Risks

• Clinical efficacy and safety may fail to replicate in larger or broader-population trials.
• Neuropsychiatric and behavioral adverse events could limit uptake of AMPA- and Kv7-related therapies.
• Regulatory outcomes, restrictive labels, payer resistance and reimbursement friction could reduce commercial opportunity.
• Commercial execution, patient access, competition, exclusivity loss and pipeline-development risks remain material for the covered companies.

What to watch

• RAPP's October Phase 2 bipolar-mania data, particularly safety and tolerability findings.
• RAPP's larger randomized Phase 3 validation and planned 1H27 Phase 3 initiation in primary generalized tonic-clonic seizures.
• XENE's real-world psychiatric and behavioral tolerability, treatment uptake, and results from X-ACKT and X-NOVA2.
• PRAX's Phase 3 EMERALD efficacy and tolerability in broader DEE populations.
• STOK's Phase 3 EMPEROR seizure endpoint and secondary outcomes, plus payer response to disease-modification claims.
• Adoption of Jazz's oral Epidiolex capsule formulation.