Xenon Pharmaceuticals paused new enrollment in its Phase 3 depression program for azetukalner after reported neuropsychiatric adverse events, sending shares down as investors recalibrate the risk-benefit profile of the asset. The company said it stopped recruitment based on events that were not seen in earlier testing in depression but emerged in the broader population. The trials will continue with patients already enrolled, with results expected in early 2027, and Xenon indicated it is assessing potential dosing modifications to mitigate adverse events. The company described the events as mild to moderate, short in duration, and reversible, and noted they were consistent with the drug’s known safety profile and mechanism. Investors had been encouraged by azetukalner’s FDA review progress in focal seizures and by pivotal epilepsy data that drove a prior share run-up. Xenon’s chief medical officer, Chris Kenney, emphasized its confidence in the epilepsy product profile, citing efficacy and safety data across more than 1,500 patient-years. The pause highlights how neuropsychiatric signals can reframe outlooks even for assets already moving through regulatory scrutiny in adjacent indications, with trial enrollment decisions now becoming a near-term catalyst for both clinical interpretation and capital markets.