Anavex Life Sciences Corp.

Good afternoon. My name is Erin, and I will be your conference call operator today. Welcome to the Anovex Life Sciences Fiscal 2021 First Quarter Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Clint Tomlinson. Sir, go ahead.

Thank you, and good afternoon, everyone. We appreciate you joining us today for Anovex Life Sciences Conference Call and Webcast. with us today is Dr. Christopher Misling, President and Chief Executive Officer, and Sandra Boenisch, Principal Financial Officer. Dr. Misling and Ms. Boenisch will make prepared remarks, and then we'll take questions from equity analysts. Before we begin, please note that 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 companies 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 may include, without limitation, risks inherent in 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. Misling.

Thank you, Clint. We appreciate everyone joining us on today's conference call to review our financial results and business updates. I would like to first share with you our recent clinical and pipeline updates. Let me start with Rett Syndrome. Based on recent Phase II US Rett Syndrome clinical trial data, which showed positive clinical activity and safety data, potential accelerated approval strategy planning is underway. There will be progress with ongoing phase 2-3 avatar adult Rett syndrome and phase 2-3 excellence pediatric Rett syndrome studies. At the same time, the FDA has approved an extension of Anavex 273 US Red Syndrome Phase 2 Open Label Extension Study from 12 weeks to 36 weeks. In Australia, Anavex received Compassionate Use Special Access Scheme approval for Red Syndrome patients to continue treatment with Anavex 273 after completing the Avatar Adult Red Syndrome Clinical Extension Study. This is very good news for the patients. and as a reminder, we had previously received compassionate use, special access scheme approval for Alzheimer's disease in Australia. Anavex has sufficient Anavex 273 drug substance available to support all ongoing in-plant clinical trials and first-year commercial launch needs for the Rett syndrome program. and Anavex 273 drug substance in oral solution exhibit excellent chemical stability based upon three years of stability data in both cases. That is very important. Let me now briefly switch to Parkinson's disease. We announced recently that Anavex has been awarded a research grant of nearly $1 million from the Michael J. Fox Foundation for Parkinson's Research. to develop Anavex 273 for the treatment of Parkinson's disease to explore utilization of PEP imaging biomarkers, which demonstrates the continued focus on a potential disease-modifying treatment for Parkinson's disease. As a reminder, our clinical strategy is clearly differentiated from other biopharma companies and clinical studies in central nervous systems. Arnavix is continuing to pioneering the approach of big data in clinical trials to leverage the relevance of phenotypic and genotypic precision medicine analysis of whole exome sequencing and gene expression data in drug development and in particular the potential to identify patients' genetic variants and gene expression changes. that may predict increased chances of success of Rett syndrome, Parkinson's disease, and Alzheimer's disease treatments. Regarding Alzheimer's, a very important scientific finding emerged recently. Researchers at the University of California San Diego have identified the underlying cause of Alzheimer's disease in neurons. They discovered that changes in the structure of chromatin are responsible. Sigma-1 receptor, the direct target which gets activated with Anavex 273, demonstrated to restore chromatin structures. In published experiments, Anavex 273 has been also linked to the prevention and treatment of age-associated diseases through induction of the autophagy cellular recycling process. and Enhanced Protein Clearance in Cell, which is relevant in these diseases. Onomex 273 is currently in a Phase 2 B-3 Alzheimer Disease Clinical Trial utilizing differentiated patient selection criteria and the study is presently over 86% enrolled and randomized. Lastly, Let me also briefly switch to our new clinical pipeline compound, Anavex 371, which is currently in a Phase I and is on track. Independent Data Safety Monitoring Board, DSMB, for the company's Phase I study of its new investigational compound, Anavex 371, also a small molecule activating the Sigma-1 receptor, has completed its recent pre-planned review of the preliminary Phase 1 safety data that DSMB recommended to continue the study without modification.

And that is a very positive outcome.

And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Arnavex, for a brief financial summary of the recent reported quarter.

Thank you, Christopher, and good afternoon, everyone. We reported a net loss of $7.9 million for the quarter, or 12 cents per share, as compared to $6.6 million, also 12 cents per share, in the comparable quarter of last year. Research and development expenses were $7.9 million for the quarter, compared to $6.3 million in the comparable period, while general and administrative expenses remained unchanged over the comparable period. Our clinical trial expenditures and the trials expand internationally. We reported an increase in other income to 1.6 million for the quarter as compared to 1.1 million in the comparable period. This increase is related to research and development incentive income in connection with our Australian clinical trial activities. Lastly, as of today, our cash balance is approximately 75 million dollars. Our cash position at December 31, 2020 was $47.4 million. Thank you, and now I will turn the call back over to Dr. Mischling.

Thank you, Sandra. In summary, we are thrilled to begin the new year with this strong business outlook, which will allow for multiple new-term data announcements combined with continued fiscal responsible management of resources. This adds to the breadth of strong clinical data we've reported across our precision medicine pipeline using orally once daily available Anavex 273 for Rett syndrome, Parkinson's disease, dementia, and Alzheimer's disease. We look forward to providing on a timely basis in 2021 multiple clinical data readouts from these clinical programs. The converging biomarker-driven clinical data and further molecular understanding of our biological target, the Sigma-1 receptor, is giving us added confidence in our efforts to meet our goal of potentially bringing new therapeutic interventions to patients. Further clinical milestones are provided in our latest corporate presentation, available on www.anavex.com. We are very excited about this year before us and we look forward to continued new data updates throughout 2021. I would now like to open the call for questions. Operator, please go ahead.

At this time, we'll be conducting a question and answer session for equity analysis. If you'd like to ask a question, please press star 1 on your phone. A confirmation tone will indicate your line is in the question queue. Or you may press the phone key if you would like to remove your question from the queue. Your first question comes from Charles Duncan with Kantor. Your line is open.

Yes, good afternoon. Thanks for taking my question, and congrats on the progress, Chris and team. Had a couple of questions, first on the RET program with 2-73. I'm wondering, with regard to the U.S. RET study, when would you anticipate being able to provide additional details from that study and congratulations on being able to extend the open label extension of that study from 12 weeks to 36 weeks but can you help us understand a little bit kind of the rationale for that extension of the study and what is the percentage of patients that have enrolled or continued on into the study in that extension phase?

Thank you for the question. Let me start with the last first. So from the patients who finished the placebo-controlled part of the US study, 100% of patients continued in the extension study. and the reason for the extension of the extension by another six months was the interest from the participating patients and families as well as the ability to continue to learn and add long-term safety data for Rett syndrome patients with outcome part. Regarding the first questions, We actually have not yet fully released the precise data on the Rett syndrome outcome, the baseline Thank you very much. We look forward to that, Christopher. Would you anticipate it with

Thank you very much.

Yeah, so the community only is interested in learning more about it and we are happy to provide it as soon as we can in order to get the data because this variant data requires genetic analysis which was not readily available until now, but we will have it. We can either do this in a conference which we find timely and suitable or we will provide it in a press release with a webinar together and that will allow for everybody to be informed about this data.

Okay, one last question on RET. Can you provide any color on how the pediatric trial excellence is going and then the adult trial avatar and when would you anticipate being able to read out those two studies?

So we think the trials are proceeding well. We stated that the Avatar study will be read out within the first half of this year and the Excellence study in the second half of this year. That is right now our latest update in time expectation on these studies.

Okay, and then my last question is on the Parkinson's disease side for 2-7-3. Not a lot of companies have had success in Parkinson's disease dementia, and I guess I'm wondering with your provocative data that you spoke about recently, I believe it was at CTAD last year, What are the next steps for that program? Could we see that move into a later stage study this year and would you be seeking agency guidance on that?

So we have noticed that there were at least three Parkinson's disease dementia studies which had failed with other companies recently. and that shows that Parkinson's and dementia is an extremely difficult study to execute and we are fortunate that our study was positive and what we are now doing and we pointed it out when the data came out at CTAT that we are now gathering the entire understanding of the participating patients with their background information The correlation with the outcome and then present that data to the FDA, to the agency in order to seek guidance and to agree on a pivotal study design which we would then undertake based on that detailed data for patients with Parkinson's disease dementia.

Okay, final question regarding the platform, then I'll hop back in the queue. 3-71, new candidate, congrats on moving that one forward, but can you tell us anything about that candidate relative to 2-73? How does it differ? Is it from a different chemical series? Does it have different brain penetration, different pharmacology? Any color on that would be helpful.

So what we know about Anavex 371 is that it is a completely different molecule. It was licensed in from the Weizmann Institute in Israel, and we developed all the necessary preclinical data, toxicology, manufacturing, CMC, to bring it to where it's now. What we do know, the differences with SuisM3 are twofold. Anavex SuisM1 has a strong affinity to the Sigma-1 receptor. and has also a more pronounced muscarinic M1 affinity than Anavex 273, which has a stronger affinity to other muscarinic receptors, but in a much weaker point. So we will really need to see in a direct comparison how they are playing out. What we have noticed that we received for Anavex 371 often does a drug designation by the FDA for frontal temporal dementia and we might bring 371 towards indications first which are not competing with Anavex 273 directly but we are very excited that we have another compound with the same valuable target of Sigma-1 activation which is and turns out to be so important biologically that we can use this also for indications which we have not yet covered to symmetry.

Excellent. Thank you for taking my questions, Christopher. Good luck for the pipeline progress this year. Thank you.

And your next question, thank you, comes from Ram Salaraju with HC Wainwright. Your line is open.

Hi, thanks very much for taking my questions and congratulations, Chris, on all of the recent progress. I wanted to just first of all start off with a few questions regarding the Rett Syndrome program. Firstly, I was wondering if you could elaborate upon any additional gating items, assuming that the data from the upcoming studies is positive. You had mentioned previously that this could potentially serve as the basis for regulatory submission in the United States, but I wanted to gain a better understanding of What additional gating items there may need to be or that there still are as you go through the steps in potential preparation of an NDA. Secondly, just wanted to clarify whether this program, if it were to be the subject of an ultimate regulatory approval, would qualify you for the receipt of a priority review voucher. And then thirdly, if you could maybe comment a little bit on The nature of the Rett syndrome competitive landscape as it currently stands, where you expect that to be at the time when Blarkamathine might potentially be introduced into the market as a treatment for Rett syndrome, and also if you could give us a sense of what might be required to launch a drug like Blarkamathine into the Rett syndrome population. Thank you.

Right. So the first question was about getting items. We are doing the same what I mentioned for Parkinson dementia which is the entire genomic soma analysis which is part of the clinical study and we want to prepare the package and meet the FDA and share that data with the FDA. The additional data from Avatar and Excellence will be supportive and I expect it to be supportive. The ability to get voucher is given that we have fast-track designation and orphan designation and we also have the voucher legibility. So that also is a positive answer if the patriotic study is positive. Regarding the landscape, we have heard and learned that one of the competitors in red syndrome has dropped out. Entirely, which is DW Pharma, they initiated and stopped because of the COVID situation and retired entirely the program in Rett Syndrome, which is positive for us, we believe. And the fourth question is, Regarding marketing, we have an extremely good relationship with the Rett community, with the Rett Syndrome Foundation, and not only in the U.S., but especially in the U.S., but also around the world. And we understand the physician's background, the physician's center for Rett Syndrome, the Center of Excellence very well. and this is really a classical case where a company can move into marketing the drug ourselves like example has shown like Alexion and other comparable companies which had successfully launched a drug in rare disease setting in the size we have at hand with RAD syndrome.

Very helpful there. Also, I was wondering if you could comment on the current status of the special access scheme in Australia and whether you think that that element of the overall Rett Syndrome program is likely to yield usable or significant clinical data that you could use in support of future regulatory applications. And if you could maybe give us a sense of what the size of that program is right now, you know, how many patients are receiving drug as part of the SAS.

So the compassionate use program in Australia has the benefit that it allows for patients who are on the clinical study and after finishing the study on the extension study and after finishing the clinical extension study would basically be left up without any further treatment. and that allows them to continue the drug with the supervision of a physician and right now we limit this pretty much to the existing patients which entered our study and the advantage is that once the drug will get approved they will be automatically becoming eligible then to be prescribed the drug once it's approved for market authorization.

Okay, great. Just a couple more from me. I was wondering if you could comment on the recent activity in the Alzheimer's space and the fact that there seems to be a great deal more enthusiasm at this juncture for proof of concept clinical results in Alzheimer's disease and I think part of that can be attributed to anticipation that perhaps with The goalposts may have been moved actually a little further apart and in point of fact the process by which Alzheimer's drugs get approved could conceivably be construed as getting easier. A potential reflection in fact of the severe unmet need out there. But what are your thoughts regarding what the regulatory environment might look like in a post-aducanumab approval situation and what implications that has for your Alzheimer's program.

Obviously, I cannot predict what will happen on June 7th when the meeting from the FDA will take place to decide about ADU, but I would say that if it turns out positive, and that is a scenario you refer to, It would actually mean that the FDA would agree that one robust clinical study would be sufficient to prove a drug in Alzheimer's disease. And since we are running now a robust phase 2b-3 study as well, this could be a positive for us in that regard. If the decision on the 7th of June is more negative in outcome, then it would still not believe we're not in way or shape impaired because we are basically by that time advanced with our study and there's also ability for Supportive Data from the Phase 2A with our Phase 2B-3 study. So we just put our heads down and move ahead. But I would think that it's possible that there will be positive resonance if the study would be approved, the other study would be approved mid of the year.

Okay, great. And then just three other very quick ones. Firstly, assuming you have positive data in Rett Syndrome, What implications might that have for future development of lacamycin in other orphan neurological diseases? And can you elaborate at this juncture, you know, what would potentially be your highest priority choices with regard to future orphan CNS indication development? Secondly, what is the significance from a commercial standpoint of the oral solution in particular as this pertains to Rett syndrome. I think, you know, we may have touched upon this in the past, but it probably is worthwhile reiterating that. And then lastly, I was wondering if you could comment at this point about the possibility of co-formulation, co-administration, synergistic combination of Blartamacine with other compounds in the Anavex pipeline. and if that's likely to be the case, if that is something that you think might be something you wind up exploring in the future, which other compounds or which other types of compounds from the Anavex earlier stage portfolio might be likely to be most synergistic with black amethyst?

The first question regarding, or the second question regarding the solution, I think it's a very strong advantage because many of these kids or girls, they have a hard time swallowing. Some even cannot even eat. They have an artificial pouch to a feeding tube. And liquid formulation is the only way actually to provide a drug substance. The first question regarding what could trigger the approval of Rett Syndrome, we have seen that Anavex 273 has been extremely strong in treatment studies to also affect the pathology of Fragile X, which is autism spectrum disorder, as well as infantile spasm and Angelman syndrome, another rare disease. These are all three rare diseases. But Fragile X is the largest rare disease of these autism spectrum disorders, and with a multiple of the patients, then Rett syndrome patients, So since we have very strong data and Rett syndrome happens to be a part of the autism spectrum disorder, given now we have basically supported data, very strong data particularly in clinical in Rett syndrome, we have now very strong and supportive data in particularly in fragile X. We believe that the chances have increased to also be successful in a clinical study in Fragile X. And that's why we're planning, and we already have developed the study design, to move into Fragile X as a next study for Anodex 273. Regarding the last questions about synergies, We don't know if the synergy with another Sigma-1 agonist might be the best choice. I would rather think that a synergy could be with other compounds targeting other pathways. Like if ADU will get approved, we believe it will be synergistic to Anavex-3 because it is a different pathway but also we have seen that Arnavex 2.0.3 has been shown preclinically to prevent the disease so it's not only the treatment which is the goal and that's what we're now finding out with our ongoing phase 3 study in Alzheimer's disease but also thinking ahead strategically that one day Arnavex 2.0.3 could be used as a daily mini aspirin potentially to avoid coming in even near to be in a situation where you get affected by or afflicted by such a horrible disease like Alzheimer's disease. Many thanks. Thank you.

And your next question in queue comes from Robert LaVoyer with Linenberg-Dalman. Your line is open.

Hi, I had a quick question on 373 and the mention that the DSMB had recommended continuing the trial. I was wondering how long it's going to continue for, when we might see results, and if positive, when that might move forward. And also, in the Parkinson's program, I saw that the data from November included some secondary endpoints. Is there any plan or anything where you might be presenting the full study data on Parkinson's trial?

Right. First question, 371. We have several panels in the Phase 1, and the first two panels was A single ascending dose, and that was very impressive that we got this green light to move forward now in the panels of going into female-male effect, their differences, as well as Recurring Treatment, as well as foot effect of the drug. So basically the most, if you like, the most important hurdle of a phase one is like those ascending that was well tolerated to the highest dose, the planned dose was positive. That is the most, I would say, crucial information about the phase one study. And now comes just nuances of the phase one. We said that we would have the data within the first half of 2021. I think it looks like it will be earlier than, not waiting until the June time, but much earlier than that, given where we are with the study. Regarding the second question, I think, remind me again the question, please.

That had to do with the presentation of the full... Oh, right, the PDD, right.

Excellent question. So the CTAT was really focused on the dementia portion of the study, the dementia portion of the PDD study. What is now... will come up and we will present that in a proper fashion, either at a conference or in a peer-reviewed form or in a webinar or in that fashion. We will provide the entire data of all the other measures of the CTAR system, which are many more than the ones presented at CTET, which also was a very short time frame of presentation of only 10 minutes. and it will also include the Axiography data and other data related to Parkinson's disease. So this will be something which we are also planning to present on a relatively short notice. So in order to have the full picture of PDD and the same applies here, this data, this aggregated data will be put in front of the FDA and to seek guidance in order to design a pivotal study in PDD.

Great. And did you mention any plans to move Fragile X or Angleman into clinical trials this year?

Right. So one of the targets, one of the anticipated milestones which we have provided at the last call was to initiate a Fascia-like clinical study. And we will do that with the guidance from the FDA. Also, I'd like to mention that we have submitted a paper of the entire preclinical package, preclinical data, for pleasure legs with unexplained degree, and we expect that paper to be published to be published eventually and totally soon. So this will be the entire preclinical data package of Fragile X of ANAVEX-3, which should and will make the case, a strong case, that the moving Fragile X with ANAVEX-3 into the clinic is warranted.

Great. Okay, thank you very much.

Thank you.

The next question comes from Tom Bishop with VR Research. Your line is open.

Hi. Christopher, I'm a little puzzled that back in November you said you were over 80% enrolled, and now you're saying 86% enrolled. If you had a little quick math, 6% of 450 is only about 27 patients in the last three months, which is... What am I missing here about the complexity of signing this up?

So, you must appreciate that before the last time we spoke, and now it was in December, was the holidays. And during the holidays, there's literally a full stop in enrollment and activities of such things. We also want to point out that we added more sites and I think there will be an acceleration from now on. So I don't think that is too much to worry about. On the other hand, I want to point out that we want to make sure we're getting the right patients into the clinical study. And we have a very solid screening process to make sure that they are fulfilling the requirements of inclusion. of the study. And so we rather want to have the right patients than enrolling too quickly and having the wrong patients. That's basically the background. But really, I would not read too much into this. It's literally really the holidays which led to this, you know, relatively. But I think we are very comfortable that there's actually a very good enrollment compared to other companies.

Okay. So how many sites are enrolling right now?

I think if I'm adding all up, it's between around 40 to 40, almost 50. I have to count again all the sites, but we added sites in Germany, in UK, in Canada, in Netherlands.

Okay, well then, so we're still hoping for early 2021 end of the enrollments?

Yeah, we have not changed it, and we've had the data announcement of the data, which is actually what matters, will be in the first half of 2022, basically a year after the last patient gets enrolled. And then you have to add also time for data lock and data clean, but the timeline is still unchanged for that.

Okay, and regarding the $75 million in the bank as of today, does that Right. Right.

That's an excellent point, and good that you asked this question, Tom. Really fortunate that we have this tool in place, and it was exactly meant to for that reason, to when there's really an unexpected and positive share price move, that we're able to, with least dilution, to basically use this tool in order to make shareholders the least dilutive way possible How many shares are outstanding now? We were obviously very fortunate to take advantage of this short move, but I think the details will be provided in the next queue, which will show up early next week, because the latest filing will be on Monday, because Monday is a holiday, so it will be next week, Tuesday, most likely.

So you'll have the share count on the cover of the 10Q?

Exactly right, yes. But as you can figure out, the least dilute is possible, so... It will be not by much.

Okay, so SFVA, or CASAVA, has proven that interim data may allow a company to start on a Phase 3 trial while the Phase 2B or 3A trial is still continuing, if my perception of the news is correct. So is there any more thoughts of an Interim Leadout. Or maybe I'm wrong on this, so...

I think the trial you're referring to is an open data study, so that is a different situation you have here. But I just want to point out that we obviously are almost completing the randomization of our phase three study, if you so like. What the other company mentioned still has to start. And the other point I'd like to make is that we have the program in Rett Syndrome, which could generate revenue pretty soon by itself, in addition to Parkinson's disease, dementia data, which also is unique for Anavex. So I think we're in a good position, and we're just making progress as we go.

But as regard to an interim analysis of the Phase 2b3...

Well, but is my understanding correct that is it possible that

that the interim data from this study could enable you to get going already on the Phase 3 study even while the full readout, full enrollment and readout of the Phase 2B3 study is ongoing?

Well, the Phase 2B3 is our Phase 3 study, so we think that is a pivotal study.

Okay. and I think if I understood somebody else's question, he was fading in and out of my line, was that Parkinson's physical data, we're still awaiting that, right?

The genome data and the Parkinson's, the actigraphy data and so forth, is that what you've found?

The dementia data and then there's the effect on Parkinson's itself, which I think...

Right, on the movement, that's correct. This is what I mentioned. We will release the data in short order once we have it all together. and that will be something we will present either at a conference or in a webinar for everybody to see exactly the effect of the drug in these patients.

Great. All right. Thank you very much, Christopher.

No, I appreciate it. Thank you.

Thank you, ladies and gentlemen.