Vancouver, Canada - Xenon Pharmaceuticals Inc., a privately held company engaged in developing small molecule therapies for select neurological, cardiovascular and metabolic diseases, today announced the completion of an equity financing of US$31 million. This investment will support the clinical development of Xenon’s product pipeline.

The financing was led by two investment companies, MX Associates LLP and LipoteRx Ltd., both of which were established by principals with extensive clinical and regulatory experience. Several existing Xenon institutional investors, including INVESCO Private Capital, also participated in the offering. As part of the financing, Dr. Evan Stein, Managing Partner of LipoteRx Ltd. and a successful medical entrepreneur with substantial expertise in clinical drug development will be joining Xenon’s Board of Directors. Dr. Stein is the founder and past President and CEO of Medical Research Laboratories International (MRL), a global company focusing on centralized laboratory testing for pharmaceutical company and NIH clinical trials. MRL was sold to PPD, Inc. in 2002.

“This financing will support Xenon’s next phase of growth as we advance our novel therapeutics into clinical development” commented Dr. Simon Pimstone, Xenon’s co-founder, President and CEO. “This financing led by a group of highly successful entrepreneurs with significant clinical and regulatory experience including multiple NDA’s between them, adds an important strategic component to the investment. They share our vision of building Xenon into an integrated pharmaceutical company with products on the market”.

“Xenon’s clinical genetics approach has yielded one of the most exciting development pipelines that we have seen. We are very optimistic about its future prospects including the products for pain and arrhythmia, and we are delighted to have led an investment in the Company,” said Dr. August Troendle, Managing Partner of MX Associates LLP.

Xenon’s lead products, XEN401, for chronic and acute pain and XEN501 for acute termination and prevention of atrial and ventricular fibrillation are each in pre-clinical IND-enabling studies. The Company’s SCD-1 program for obesity and metabolic syndrome is partnered with Novartis Pharma AG. Xenon’s drug pipeline also includes a pre-clinical program for the treatment of iron overload disorders. The funds raised through this financing will be used to advance Xenon’s pipeline to human proof-of-efficacy milestones.

About Xenon Pharmaceuticals Inc.

Xenon is a privately owned, clinical genetics-based drug discovery and development company engaged in developing small molecule therapies based on the genetic causes of select metabolic, neurological and cardiovascular diseases. Xenon’s lead products, XEN401 (pain) and XEN501 (cardiac arrhythmia) are expected to advance into clinical development in 2006. XEN600, Xenon’s iron overload lead series is expected to yield a clinical candidate in 2007. For more information, visit the Company's website at www.xenon-pharma.com.

For more information regarding this press release, contact:

Dr. Simon Pimstone, President & CEO
Xenon Pharmaceuticals Inc.
Phone: (604) 484-3300
Email: ddunn@xenon-pharma.com

Vijay Sondhi, CFO
Xenon Pharmaceuticals Inc.
Phone: (604) 484-3300
Email: vsondhi@xenon-pharma.com

This release contains forward-looking statements that are not based on historical fact. These forward-looking statements 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. Readers are cautioned not to place undue reliance on such forward-looking statements.# # #