Welcome to the Anavex Life Sciences to announce fiscal 2020 Third Quarter Financial Results Conference Call. My name is Rebecca, and I will be your operator for today's call. [Operator instructions] Please note that this conference is being recorded. I will now turn the call over to Clint Tomlinson. Please go ahead..

Thank you, and good morning, everyone. We appreciate you joining us today for Anavex Life Sciences conference call and webcast. Our agenda is to review the company's financial results for its third quarter of fiscal 2020 and provide a clinical study update.

A taped replay of this call will be available approximately 2 hours after the call's conclusion and will remain available for 1 month. The call will also be available for replay on Anavex's website at www.anavex.com. With us today is Dr. Christopher Missling, President and Chief Executive Officer; and Sandra Boenisch, Principal Financial Officer. Dr.

Missling and Ms. Boenisch will make prepared remarks, and then we will take questions from equity analysts. Before we begin, please note that during this conference call, the company will make some projections and forward-looking statements regarding future events. We encourage you to review the company's filings with the SEC.

This includes, without limitation, the company's forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements.

These factors include, without limitation, risks 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'd like to turn the call over to Dr. Missling..

Thank you. Thank you, everyone, for joining us on today's conference call to review our third quarter financial results and share with you some clinical updates for ANAVEX 2-73 or blarcamesine. During the last quarter, since our last conference call, we have continued to advance our clinical programs with several key milestones accomplished.

Just yesterday, we announced having received compassionate use Special Access Scheme approval for Alzheimer's disease patients' continued treatment with ANAVEX 2-73 by the Australian Government Department of Health, Therapeutics Goods Administration, TGA.

This is certainly an important milestone, and we are honored to support medical professionals and their patients seeking treatment for Alzheimer's disease and who have very few medical options.

In June, we received approval from both the Canadian and the United Kingdom health authorities to expand the footprint of the international Phase IIb/III double-blind, randomized, placebo-controlled safety and efficacy trial of ANAVEX 2-73 for the treatment of early Alzheimer's disease into Canada and the U.K., respectively.

And in these global regions, it's expected to continue steadfast or even accelerated enrollment of this important Alzheimer's disease trial while also adding international footprint in North America and Europe. We announced in June the complete enrollment of the ANAVEX 2-73 U.S. Phase II Rett syndrome trial.

The enrollment target was surpassed by 50% with 31 patients now enrolled in this trial. We expect to announce top line results from this study in calendar Q4 2020. Furthermore, just last month, we announced that the first pediatric patient was dosed in the third study of Rett syndrome program, the EXCELLENCE trial.

This Phase II/III trial will evaluate the safety and efficacy of ANAVEX 2-73 in over 69 patient -- pediatric patients with Rett syndrome aged 5 to 18 over a 12-week treatment period, incorporating ANAVEX 2-73 specific precision medicine biomarkers.

We were also pleased to report in July that the first participant was enrolled in a Phase I clinical trial of ANAVEX 3-71, which focus on the treatment of frontotemporal dementia, FTD, for which ANAVEX 3-71 was previously granted Orphan Drug Designation by the FDA.

The Phase I clinical trial is a prospective double-blind, randomized, placebo-controlled study. This study will be followed by longer-duration dosing, including FTD patients and incorporating exploratory efficacy in disease biomarker measures. Top line data is anticipated in the first half of 2021.

Finally, Parkinson's disease dementia top line results from the Phase II study are forthcoming and are expected to be announced during this fiscal quarter. 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, and good morning, everyone. We reported a net loss of $6.5 million or $0.11 per share during the quarter as compared to $6.5 million or $0.13 per share in the comparable quarter of fiscal 2019. Our general and administrative expenses remained consistent quarter-over-quarter at $1.4 million.

Research and development expenses were $6.7 million for the quarter ended June 30, 2020, an increase of $0.9 million over the comparable quarter in 2019. This increase is a result of increased clinical trial activities and the continued advancement of existing clinical trials.

Our cash position at June 30, 2020, was $27.6 million compared to $22.2 million at September 30, 2019. Thank you. And now I will turn the call back over to Christopher..

Thank you, Sandra. In summary, I want to point out that despite these challenging times, we continue to make steady progress with fiscal responsible work towards reaching several important milestones, and we are poised to an exciting time ahead with multiple data readouts ahead of us.

We look forward to providing further updates as advancements continue. I would now like to open the call for questions. Operator, please go ahead..

[Operator Instructions] And our first question is from Charles Duncan from Cantor Fitzgerald..

Good morning and congratulations. I wanted to ask you a couple of questions. First of all, regarding the PD cognition study, what would you look for out of that study to give you confidence to continue to invest in that particular indication? It seems like PD is -- or particularly, cognition in PD is somewhat of a heterogeneous indication.

I'm just wondering what you -- how you would define success..

We are doing the study from the background that we had a signal in our Phase IIa Alzheimer's disease cognition study. And we then had, in parallel, a Michael Fox Foundation-sponsored preclinical study in an animal model of disease modification of Parkinson's.

So when this data came together, in the outcome, we're considered sufficiently positive to explore these features in one study. That's where the advice from advisers, scientific advisers from Michael Fox Foundation came out to do and execute this study.

So it's a combination of looking for cognition, but also looking for features of Parkinsonian disease that can be alleviated with the drug ANAVEX 2-73. And we decided to shift the focus on the dementia part. So the primary end point is looking at the dementia domain.

And the secondary end points are those which are more considered the Parkinsonian impairment, like UPDRS as well as sleep, across data, including in motor impairment features as well as very heavily biomarker -- including biomarker measures, which even goes beyond the classical biomarkers because we're also including the entire genome, including the RNA and the DNA.

So I think once we have the data, we'll be able to hopefully be very aware of what's going on in this study..

Yes. So just if I could follow up. So you -- it sounds like you'd look for a signal in terms of the dementia component or cognition components, so you look for that. And perhaps you'd look for a lack of signal or impact on UPDRS in terms of impairment.

And would you hope to see any improvement? I mean I could easily see you seeing some improvement in, for example, sleep parameters..

Right. We don't want to exclude anything. We just really take this as a very objective study to look at what happens in the study when treated with ANAVEX 2-73 versus control. And this is what we really look forward to seeing. ..

So it's very much a signal-seeking study.

You don't have any, call it, biases in terms of effect size or anything that you're thinking about?.

Right. We just want to see a signal first, and that could be however it is, and that would be then -- certainly, we can move from there by sharing with the regulatory bodies and take it from there since it's a highly unmet need since now almost 80% of all Parkinson's patients develop dementia..

Okay.

And I think you mentioned that data should be by the end of September?.

We said this quarter. And also, it will definitely be this quarter. I don't want to go in more specifics. We will report exactly when we have the data. ..

Yes. That's cool. Last question then regarding the first Rett study, the U.S. Phase II.

Can you provide any color on the types of patients that were enrolled? Any characteristics that kind of broadly can help us understand that study enrollment and what you look for out of it?.

Yes. So we had the benefit of having already a glimpse of the data in the first cohort, which was the PK cohort of 6 patients. And in this cohort, we saw that there was a signal already, which correlated really nicely with the biomarker of a disease-specific biomarker, the glutamate level.

And we make sure that, because this is also a complex disease, that we include patients which are able to show an improvement over the various phenotypes of the disease, which is very broad. It ranges from movement impairment to features of cognitive impairment of response, of seizures, of sleep impairment, of startling and breathing impairment.

So you want to make sure that you include patients who have some level of dysfunction then to be able to discern an effect with the drug..

Sure.

And you feel like the enrollment went consistent to the protocol requirements?.

Yes. So we have made sure that we have always looked for every patient being specifically matching the inclusion/exclusion criteria..

Yes. And beyond just the age restrictions, I know in your other study, you're doing pediatric patients, 5 to 18, which is in itself a big range. But beyond that, when you think about the sample for that first U.S.

trial, how does that sample relate to the broader set of patients, Rett patients? Do you think that you've captured a fairly good set or good, broad coverage on the entire population? Are you hitting a certain niche that really can be useful to determining the potential use of 2-73 in that population?.

Yes. So the U.S. study is 18 years and older, and it sounds like very generous, but the reality is there's actually less patient pool for study available in older patients for various reasons.

And we basically are happy that we were able to enroll, especially in the last few months, many more patients than we had actually planned for because we just had planned for 21 patients at the beginning, and then we added up 10 more to end up now at 31, which is very beneficial for a calculation of the efficacy.

And so we were very pleased about that without having to give up any -- on the quality of the patients or participants in the study. So what we do know from scientific experience is that it is usually harder to find a change of phenotype in the older the patients are, especially in neurodevelopmental diseases.

So that means if you treat earlier, it's likely that you are able to find a signal. So the fact that we already saw something in the first 6 patients in adults, in the adult study, but also with the lowest dose, it's kind of very encouraging..

Yes, for sure. But it's a heterogeneous patient population, it sounds like and, again, should be viewed with a perspective that it's signal-seeking, not -- certainly not dispositive..

Well, I think we want to, again, see what will be the outcome. We had a very strong effect side in the first 6 patients. I don't know if we can use that as a benchmark for the entire study. It would be great. If so, that would play out in the study.

And I think we will see when the study will read out, which is, as I mentioned, by the end of this year, latest..

Perfect. Okay. Chris, we'll look forward to data flow over the second half of the year..

Thank you..

Your next question is from [indiscernible] from H.C. Wainwright..

This is Marks speaking on behalf of Ram. The first query relates to the Parkinson's, the dementia trial, and then I have a couple of follow-up pipeline questions.

But firstly, what do you think in terms of being the most crucial test in the Parkinson's disease dementia trial is? Would you say it's the CDR or the MDS-UPDRS? And if the Phase II trial is positive, would a Phase III trial suffice?.

What was the last question? Is the Phase II positive?.

If the Phase II trial is positive, would a single Phase III trial suffice?.

I see. So the answer to the first question, the CDR continuity of attention is the primary end point and that is definitely the most relevant signal we are looking at for Parkinson's disease dementia.

The UPDRS is a, I would say, a compositive of multiple measures, among them the movement, among them also function and, to a certain extent, activities or daily living. So that's why it's structured in different subscales, like 1, 2 and 3, and 3 being the movement subscale.

So we believe the CDR continuity of attention will give us the most important signal for the dementia, Parkinson's dementia domain. But also the other one will be interesting, that's why we included it as a secondary end point.

In terms of your second question, if the Phase II is positive, we would share it with the FDA and then take the steps from there, what would be the right way to approval or the appropriate next step for seeking approval..

Okay, makes sense.

And has the longer-term dosing study using the exploratory efficacy and disease biomarker measures been initiated?.

Say that again, please?.

Has the longer-term dosing study using the exploratory efficacy and disease biomarker measures, has that been initiated?.

You mean the extension, when you say longer term?.

Yes..

So we have, in all our studies, an extension. So both the U.S. Rett syndrome study as well as the Parkinson's dementia study have an extension.

And so the extension for the Rett syndrome study is 12 weeks in the U.S.; 1 year, the AVATAR study; and it will be also 1 year in the EXCELLENCE study in Rett syndrome; and it's 1 year in the Parkinson's dementia study; and it's 2 years in the Alzheimer's IIb/III study.

All these extension studies have not only the biomarker, but also the underlying randomized, placebo-controlled studies have the biomarker, including the genetic analysis included. So we don't have to wait for readout of the extension study to learn about that. ..

Makes sense.

And just finally, in terms of 2-73, are you looking at other CNS result? Or is it just epilepsy?.

Right. So when you look at our pipeline, you might have noticed that we have also strong evidence of an animal model confirmatory efficacy for Parkinson's, for infantile spasm, for Fragile X, for Angelman syndrome. And this indication will likely be next in line in case of we have a positive readout on the ongoing studies.

So the franchise will expand into this indication since this is something which preclinically has been shown to be already a very strong signal with ANAVEX 2-73..

[Operator Instructions] And Charles, your line is open..

I haven't heard anyone. Hopefully, Christopher is still on the line. Just one quick follow-up on the pediatric program. I'm just wondering if you could give us any further indication of the types of patients that you'd like to enroll in that. Obviously, there's a certain age group, 5 to 18. We can read what's on clinical trials.

But I'm just wondering if -- when you talk to investigators, if there is a certain phenotype that you would like to see enrolled in that, that could give you confidence in the outcome but also address really the underlying unmet needs..

So the pediatric study from 5- to 18-years old is relatively comparable to the adult study. Once the phenotype shows up in Rett syndrome, it very much stays relatively stable with some variations of that. So you're looking at a similar measure, including the RSBQ, the CGI-I and the sleep parameter or parameter.

And the question is actually identical in the adult and in the children because of the phenotype of the Rett population, the adults are still considered children.

So we have, in our EXCELLENCE study, because it's a larger study and it's geared towards a pivotal study, that's why it's a Phase II/III, we have more measures included and it's slightly longer. So the adult studies are 7 weeks in duration, and the pediatric study is 12 weeks in duration..

Okay. That's helpful. And then just if you could wax poetic, if you will, or speculate on the competitive environment. There are other programs. We did recently see one recommence enrollment around the neuron -- Neuren, Acadia side. We also know GW is doing some work in Rett.

And it would seem to me that Rett is a large unmet need, but in an orphan disorder.

And I'm just wondering if you could give us a sense of the feedback that you've gotten from the advocacy community on how 2-73 fits within the emerging treatment paradigm, assuming all of these programs are successful, which is a big leap, but the other thing is in terms of competition for patients in the programs..

So, the comment I'd like to give is that from the very beginning, we were fortunate that we were highly supported by the Rett community. The foundation itself actually was instrumental in even getting us where we are. Without them, we wouldn't have had any data in Rett syndrome to begin with.

The entire preclinical animal model were supported and financially supported and paid for by the foundation. Without them, we wouldn't have had the data. And then when the data was very positive in the animal model of Rett syndrome, then the decision was made by the Rett foundation to also support our Rett clinical study.

So I'd like to thank the Rett foundation for that very much. We also made something probably very important distinction as we learned also during the COVID time, which was extremely advantageous in hindsight. We just didn't send out the protocol and started the study without feedback from the parents of -- with Rett patients.

So, what we did, we basically asked them what is important for you, as a parent, in your respective goal to participate in the study. We learned that visits in the hospital were considered very burdensome.

So, I basically decided to then to limit the visits in the hospital and also adding an optionality in the protocol that every visit can also be assessed at the home of the patient.

And that was interesting because when COVID came along, we were able to switch to that manifestation or protocol optionality, and that also probably led to our ability to increase our enrollment to -- by 50% instead of stopping the trial entirely, which I understand other trials were forced to do..

Yes. Certainly, that is -- makes it less complex in terms of interpreting the data, but it also seems like you facilitated progress with the Rett community, and perhaps it will bode well for the future..

And we plan to continue to do that, both with the foundation here in the U.S. very much, but also abroad. In Australia, we're working with the Rett community foundation in Australia as well as in Europe and the U.K. as well. So we are hand-in-hand working towards this goal of making sure that we don't do this in the backroom..

Yes.

Last question is, do you see, does one see Rett as being a challenge to Asian communities? And is there any corporate strategy to broaden potential access to those countries through maybe partnering or other endeavors?.

There is, indeed, the same amount of Rett patients in Asia, especially in Japan and China, but especially in Japan, there's a same amount of patients there than here in the U.S. So it's around about 10,000 to 15,000 patients in Japan alone. And we do plan, after the readout of the U.S.

study, which is forthcoming, to then move into the Japanese territory to also continue the study with ANAVEX 2-73 in Rett patients in that regard..

And would those be studies you conduct? Or do you think it may be best to do that in collaboration with a partner?.

Right. So Japan is a unique market where the entities working has to be local. So there are probably a mix of a local sponsor with us together or to a 0. We have not made a final decision on that yet..

We have no further questions at this time..

So with that, we thank everybody to participate, and this concludes today's conference. Thank you very much for participating..

Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect..