AVXL - NASDAQ

Good morning. Welcome to the Anavex Life Sciences Fiscal 2023 Second Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. And during this session, if you would like to ask a question, please use the Q&A box or raise your hand. Please note, this conference is being recorded. The call will be available for replay on Anavex's website at www.anavex.com. With us today, Dr. Christopher Missling, President and Chief Executive Officer; and Sandra Boenisch, Principal Financial Officer. Before we begin, please note that during this conference call, the company will make some projections and forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. We encourage you to review the company's filings with the SEC. And this includes, without limitation, the company's Forms 10-K and 10-Q, which identify specific factors that may cause actual events or results to differ materially from those described in these forward-looking statements. These factors may include, without limitation, risk inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights. And with that, I would like to turn the call over to Dr. Missling.

Thank you, Clint, and good morning, everyone. Thank you for being with us today to review our most recently reported financial results and to provide our quarterly business update. Recent positive clinical study results and FDA approvals through the Accelerated Approval Pathway are positive for the Alzheimer's disease community, especially for patients, families and caregivers who fight everyday against this devastating disease. We look forward to presenting, including in a scientific journal once available, the complete dataset of the Phase 2b/3 Alzheimer's disease trial of ANAVEX2-73, blarcamesine, a convenient once-daily oral small-molecule activator of the upstream sigma-1 receptor, involved in restoring neural cell homeostasis and promoting neuroplasticity, which might be at the forefront of patient-centric, next-generation biomarker-guided precision medicine Alzheimer's disease treatments. With newly available preliminary efficacy results of surrogate biomarkers, we consider initiating discussions with regulatory agencies for Accelerated Approval Pathway for ANAVEX2-73. In parallel, we plan to proceed with the initiation of our confirmatory Alzheimer's disease study. We also look forward to making meaningful advances in our neurodevelopmental and other neurodegenerative precision medicine portfolio this year. In February, we announced completion of enrollment in the EXCELLENCE Phase 2/3 study, RS-003 for the treatment of pediatric patients with Rett syndrome. We expect to announce top line results from this potentially pivotal clinical trial in the second half of 2023. At the end of March, we reported the preliminary data of the 48-week open label extension Parkinson's disease dementia clinical trial. The open label study demonstrated the longitudinal beneficial effect of ANAVEX2-73 on the prespecified primary and secondary objectives, as well as on the planned primary and key secondary endpoints. It is encouraging that the patients' clinical symptoms consistently improved, longitudinally, over time during the extension phase under active [Technical Difficulty]. This data suggests that ANAVEX2-73 has the potential to slow and potentially reverse the life-altering symptoms of Parkinson's disease, an urgent unmet global need. Following on these promising results, we intend to use the same endpoints in a forthcoming pivotal study of ANAVEX2-73 in Parkinson's disease. Further, pipeline expansion of the Anavex platform using gene biomarkers of response, applying precision medicine for neurological disorders is expected, including: planned initiation of ANAVEX2-73 imaging-focused Parkinson's disease study, which is sponsored by the Michael J. Fox Foundation; a planned initiation of a potentially pivotal ANAVEX2-73 Phase 2/3 clinical trial in Fragile X syndrome; a planned initiation of ANAVEX3-71 Phase 2 clinical trial in schizophrenia; a planned initiation of a potentially pivotal ANAVEX2-73 Phase 2/3 clinical trial for the treatment of a new rare disease indication; and several clinical publications involving ANAVEX2-73, ANAVEX3-71, and Rett syndrome Burden of Illness study. In conjunction with these planned developments, we continue to expand and strengthen our team to support our objectives, including adding a former FDA Statistical Team Leader as Head of Biostatistics, as well as other industry professionals to manage and support our studies. Finally, we are pleased with the recent expansion of the patent portfolio for ANAVEX2-73 into the indication of hypertension. Hypertension or high blood pressure affects nearly half of adults in the United States, especially within our aging society. This new patent will add to our already robust patent portfolio relating to ANAVEX2-73 and further demonstrates our strong overall commitment to protecting a full range of commercial opportunities of our product portfolio. And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a brief financial summary of the recently reported quarter.

Thank you, Christopher. Good morning to everyone. I am pleased to share with you today our second quarter financial results. During our most recent quarter, general and administrative expenses remained consistent year-over-year at $2.9 million. Our research and development expenses for the quarter were $11.3 million as compared to $8.6 million for the comparable quarter of fiscal 2022. The increase in research and development was primarily a result of expanding our team as well as an increase in drug manufacturing activities and development for future clinical and potential market supply. Overall, we reported a net loss of $13.1 million, which is $0.17 per share, inclusive of $4.8 million in non-cash items. Our cash position on March 31 was $153.5 million. During the quarter, we utilized cash and cash equivalents of $8.5 million to fund our operations. At these current cash utilization rates, we believe we have sufficient cash runway to fund operations and clinical programs beyond the next four years, consistent with guidance that we provided in previous quarters. Thank you, and now back to you, Christopher.

Thank you, Sandra. This is exciting time for the company, and we remain on track for completing and readout of ongoing clinical trials and initiation of additional biomarker-driven precision medicine clinical trials as planned. I would now like to turn the call back to Clint for Q&A.

Thank you, Christopher. We can now begin the Q&A session. If you have a question, please raise your hand or enter it into the Q&A box. Our first question is coming from Soumit Roy at Jones Research. You can go ahead, Soumit.

Hi, everyone. Good morning, and congrats on all the progress. If you can give us a little idea on what kind details on the data that's on the Alzheimer's front coming up this quarter, like the biomarker details or how much of the maturity of the datasets itself?

Yeah. So, we are in the process of finalizing to receive all the black biomarkers which were measured at the trial. And once they've been all collected, they will be analyzed and put into the paper. We also have the possibility to now, because of a new data on a biomarker, which is a surrogate biomarker of the pathology, to advance the program faster than we thought into accelerated approval since that has been also the case for two previous approvals in the Alzheimer's field, and that is very encouraging for us to see that.

Got you. So, you're going to show the amyloid's status baseline versus six months or 12 months' time point?

Yes, that's right. We have not only a beta, we have tau with other pathology and biomarkers of inflammation of neurodegeneration, and these are all instrumental in describing the pathway of the pathology. And if they do -- are making different outcomes with the drug intervention, then this is very significant information of the [drug itself] (ph).

Got it. Thank you so much.

At this time, I don't see any other analyst questions.

Yeah. We see here a couple of other questions we're happy to address. Will Anavex break out clinically meaningful ADAS-Cog and ADCS-ADL scores individually? I think per group, that would be done per doses in very clear detail. The next question is, will the AD NDA be submitted before the confirmatory trial is completed? The answer is after discussion with the agency for Accelerated Approval Pathway, this would be the path which was also given to the other accelerated approval company approvals. So this could be the case as well. Otherwise, it would be not accelerated approval if you need a study to begin with. So that is the goal of getting the drug approved before completing a confirmatory second trial. The other questions I see here is, what are the -- what is the status of partnering discussion for blarcamesine? We always said, we try to maximize shareholder value. And among shareholder value is a assessment of if we can move forward the drug into the market ourselves, which is potentially possible with the rare disease space for the U.S. For other regions, that needs to be assessed. And for large indications like Alzheimer's and Parkinson, that could be more challenging, or put it this way, it could be faster reaching higher cash flow levels with a partner. So that's why we always said we would very likely partner these larger indications to reach higher cash flow, enhance, create more shareholder value for our shareholders of the company. I think -- are there any more questions?

I see one in there from Caroline from Berenberg.

Yeah. So, the question was, did you mention a confirmatory study is needed? Again, a confirmatory study is needed after accelerated approval. And so that is regarding the additional study, but it's not required for accelerated approval for approval of the drug for the Alzheimer's study.

Okay. I don't see any further questions at this time then, Christopher.

Yeah. So again, thank you very much. And we're looking forward, and we're very excited about the company's potential as well as to build on the biomarker-driven precision medicine studies with significant unmet medical need and addressing undertreated economic burden. And we're looking forward to the upcoming data readout in the Alzheimer's disease study and the pediatric Rett syndrome study. Thank you very much. Looking forward.