Anavex Life Sciences Corp.

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You have the recommendation for each of the three studies. The recommendation is to continue the studies without modifications. This is very good news and indicates we are on the right path with all these studies. As a reminder, Our clinical strategy is to clearly differentiate from other biopharma companies in clinical studies in CNS. Anavex is continuing to pioneer the approach of big data, including omics in clinical trials to leverage the level of phenotypic and genotypic precision medicine analysis. of whole genome 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 chance of success for Rett syndrome, Parkinson's disease, and Alzheimer's disease treatments. 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 quota.

Thank you, Christopher, and good afternoon, everyone. We continue to apply fiscally responsible management of cash utilization with moderate increases within budget. We reported a net loss of $8.2 million for the quarter, or $0.12 per share, as compared to $7.2 million also 12 cents per share in the comparable quarter of last year. Research and development expenses were $6.7 million for the quarter compared to $6.1 million for the comparable quarter of fiscal 2020. The increase is primarily attributable to the continued advancement of our ongoing clinical trial. General and administrative expenses were $2.2 million for the quarter as compared to $1.7 million for the prior year period. The increase is associated with the growth of our team. Our cash position on March 31st, 2021 was 75.9 million, which we believe is sufficient cash runway for up to three years. Thank you, and I will now turn the call back over to Dr. Misling.

Thank you, Sandra. So in summary, we expect a very data-rich current quarter with data readouts from multiple clinical trials and also the remainder of 2021 to be a catalyst which year for Arnavix. We look forward to providing further updates as advancements continue and I would now like to open the call for questions. Operator, please go ahead.

At this time, we will be conducting a question and answer session for equity analysts. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press the pound key if you would like to remove your question from the queue. Our first question comes from Charles Duncan, Cantor Fitzgerald. Please go ahead.

Hey, good afternoon, Chris, and team, congratulations on the progress. Certainly appreciate the update on enrollment in the Alzheimer's program. So I had a quick question regarding the DSMB decision recently to continue the study without modification. I assume that not only did they look at safety, but did they look at any efficacy endpoints? And or was there an opportunity to change the sizing, upsize the trial due to, say, you know, Data, you know, I'll call it noise or dispersions. And that was not done so that data is tracking as you would have anticipated on a blinded basis.

The Alzheimer's Study DSMB related question? Yes. Right. So the DSMB has access to all data, right? and we understand that DSMB made the decision to continue without changes according to their review. We do know also though that the focus on the review was on safety.

Okay, so they're looking at safety adverse events, but were they also considering efficacy? Were there any kind of futility analyses? Or did they have the opportunity to recommend upsizing the trial based on data dispersion?

The DZMP has, you know, usually a very independent ability of recommendations. But the DSMB itself, the priority is on the safety assessment.

Okay. So it sounds like in this case they weren't really looking at efficacy at this point.

Again, they have access to all the data, so that is the best way I can answer this question. So there was not a specific request to look into something like futility.

Okay. Can you provide some color on the rollover rates for that study into, say, the open-label extension? Can you give us perspective on whether or not patients are going beyond the planned dosing period?

Yeah. So we have a very high rollover rate from the placebo-controlled part of the study into the attention AD extension study. which is a two-year, 96-week-long extension open-label and we happen to reach the close to the end of this open-label extension study and we have been received already requests for continuation of patients on this extension study and we will very likely seek extension of the extension study because of that. And that reminds us of what happened in the Phase IIa, which was also originally limited to an extension period, and then because of requests from participants and caregivers and physicians, investigators, it was extended multiple times to end up a a five-year extension in total. And after the five year, as you know, the participants of the Phase IIa study ended up being allowed to continue to study the drug on a humanitarian exception procedure. And so this is the feedback we received from the larger Alzheimer's study, Phase IIb-III.

It seems like the positive relative to the perceived benefit that the patient is getting are lack of tolerability issues. But when you mentioned high rollover, could I assume that's like 90% rollover rate or something like that? And then secondarily, in terms of the failure rate within, or excuse me, dropout rate within the placebo-controlled portion, What were your assumptions and how well did the trial do thus far?

Right, so the percentage is in the range of what you indicated of retention. So extension into the open label study from what we understand. And we have modeled the dropout rate similar to other drugs in this field with Alzheimer's disease. It's a long study. So there is in patients with an impairment like an Alzheimer's, with multiple diseases, not only Alzheimer's but also cardiovascular features. So there is often this phenomenon that patients do not finish an entire study. So we have assumed similar rates as in the other studies in a comparable length. And I think we are not in any form or fashion different than or worse than these numbers.

Okay, that's helpful. Last question regarding the Parkinson's disease dementia program. Were you thinking about going to the agency with, say, an end of phase two meeting? And if so, can you provide some color on when that might be?

Yeah. Well, we said that we would do that. And once the data is completed, we are about to wrap up. You have to understand, in the PDD study, there were a lot of measures included. The CDR system, the UPRS, the acrography, the sleep paradigms, and most importantly, what had been the most time-consuming one, the gene analysis. And all this together will be put together in the respective report, and that will be shared with the FDA, and then we will be able to get the recommendation for the pivotal study in PDD.

We will do it as soon as we can.

We will do it as soon as we can.

Okay. Appreciate you taking my questions and the added color.

Thank you very much.

Thank you. Our next question comes from Ram Silvaraju, HC Wainwright. Please go ahead. Perhaps your phone is on mute. You may go ahead. We will go to the next question. It comes from Jeffrey Cohen from Lattenburg-Talman.

Hello, Christopher and Sandra. How are you? Hello. How are you? Doing fine. Just a few questions. So first on the income statements, Sandra, can you help us out on the incentive income for quarter and what that might look like for the balance of the year as far as our modeling purposes?

What is the question exactly?

I wanted to know about the R&D development incentive income of 1.27 for the quarter and how that may look like for the balance of the year.

I think it was 960,000 for the quarter. And we expect that that will remain consistent throughout the remainder of the year.

Okay. Okay, got it. And Christopher, can you give us some insight into the The 273 trial more specifically as far as any discussion with the agency as far as fast track or accelerated approval.

For Rett Syndrome?

Yes.

Yeah, so we have the first study finished, which was the very first study in Rett Syndrome, the US Rett Syndrome, the RS001 study. and then we had seen a very positive outcome where we presented top line data recently last year and we will now be able to share the entire data of the study and with that data we will go to the FDA and discuss with them the path forward given that we have two ongoing studies. One is the RS002 in the SAGE-H group with higher doses and RS003, which is also high doses with a younger patient population. And we believe that the first study, the RS002, could be potentially pivotal together with the U.S. study. And that is the discussion we like to have with the agency. And then after, we'll explore the approval for the younger patient population with the RS003.

Okay, got it. And any update on the PDD Phase 2 and the Avatar Phase 2-3 in RTT? Are those timelines still on track? Exactly.

So the RS001 full data will be this quarter. and the PDD study will be this quarter. And the release of the top line data of the RS002 is expected by mid of this year.

Okay. And that's in the adult population, correct?

That's the adult population, higher dose. That's right.

Okay. Perfect. That does it for me. Thanks for taking the questions.

Thank you.

Thank you. and we have Mr. Silvaraju back online. Please go ahead.

Sorry. Thank you very much for taking my questions. I apologize. I must have had a problem with the signal before. First of all, I was wondering if you could comment on strategic thoughts regarding the potential commercialization Black Amethyne in Rett Syndrome versus PDD and what implications that may have in terms of Anavex's overall positioning. Are you looking at those indications as opportunities to self-commercialize entirely or are you looking at each of them differently in terms of the degree to which Anavex is going to be directly involved in the actual sale of the drug?

That's a very good question. I think we would be not the first company to market a rare disease ourselves if approved. And that is right now the growing plan for Rett syndrome. So we have put in place steps in order to prepare for that. For the PDD, we have to be aware we have to do another study. We have some more time to think about the second education, PDD, in terms of marketing, if we would like to license it. or how to structure a partnership if at all needed going forward. So this will be something we don't have to decide right now. But Rett Syndrome, we will be able to market ourselves to this current plan in the U.S.

And pursuant to that, have you made a definitive decision regarding the disposal of the putative priority review voucher that you would be eligible for if you won approval of Blarcomacine and Rett Syndrome? Would you, in other words, apply the PRV to something else in your own pipeline, or would it be definitive that you would monetize it?

Right. This is the same flexibility we are able to retain given that we are planning to also open another study shortly after the RET study in Fragile X where we have very good preclinical data and the drug also is within the family of autism spectrum disorder like RET syndrome is as well and where the drug is expected to be also superior to current There are different ways to think about that but we don't have to make the decision yet regarding how to address the voucher.

Okay, great. And one last question. The clinical development timeline with respect to Fragile X, can you just walk us through what you expect the near-term clinical development milestones to be in the Fragile X indication?

So for approval, you mean?

Start with the near-term clinical development milestones, you know, the next clinical study, when that is likely to start and when it is likely to report data.

Right. So the RS-001 full data will be this quarter. The RS-002 top line will be mid of the year. And the RS-003 will be in the second half of this year. And in between, discussion with the agency, which will determine how the data can be utilized in order to get approval for the drug for patients which have no therapeutic available for Rett syndrome. Thank you very much. Thank you.

Thank you. Our next question comes from Tom Bishop from BiResearch.

Hi, Christopher. I've got a couple of little questions, but I have always assumed that open label extension study means that everyone gets the drug. Is that the correct assumption?

Everybody who had participated in the study previously. That is open label extension. For those who have finished the study, either on placebo or an active drug, they are able to get the drug. Not everybody, you know, without any association or being not involved in the study.

Right, right. And they get the drug for free still?

That's right, yes. Nobody has to pay for anything.

Okay. Sandra, could you just tell me the number of shares outstanding now? Now? Not average for the quarter, but now.

I think we disclosed it in the queue. It should be about $70 million.

It should be what?

$70 million.

$70 million, okay. And I was wondering how many Alzheimer's patients still from the original A273 study which was 32 patients are still on the drug. And there's a famous graphic that I like that shows the number of patients that were on the medium and low dose that showed a sharp decline in MMSE and et cetera. And those on the high dose showing very little decline. The total of the two, as I recall, was like 21 or 22 patients, and I'm just sort of wondering where the others went.

Yeah, so that was in the three-year interim analysis. We will be able to share the remainder time frame possibly in the future, but the patients who have been in the study, they have now been switched over to a – and Eligibility of Humanitarian Device Exemption. That means they're not in the clinical trial anymore because the clinical trial has completed officially, the extension, but they continue to take the drug. And I understand that runabout, it's less than 21. I think it's between 10 and 21 patients, if I'm not mistaken. And there's a very encouraging number that they're still People after five years taking the drug.

Yeah, that's true. Also, with regards to, you know, I've read some articles, you know, where other companies that are working on the Alzheimer's indication, you know, one guy, one of them has a partner and the other one's got NIH funding. And, of course, Anavex has neither, but I think that there's a good reason for both, but I'd rather hear it from you than me.

I think we're moving very quickly. When you look at those who get the NIH grants, you have to have published data, and it takes a long time to get a grant. And if you get the grant, it takes a long time until you get the money. So that's not a preferred way of moving forward the asset. We've been very quick in moving forward the assets. And the downside of partnering too early is that you are capped with the upside. So as a biotech company, you just have not retained the upside for a shareholder. and by pushing this out, that is the advantage of having no upside for shareholders of Anavex.

Right. And I was just wondering if you've ever had some interest from other people in partnering or if you just shut them down because you want to keep the 100%.

We have always been called upon and I'm knocked on the door to discuss this, and we participate regularly at the conferences like BIO regularly. So we are in discussions with the big pharma companies. But again, it has to be a mutually beneficial structure for striking something. And we are very excited about our project, our pipeline, and we'd like to retain the upside for that reason. We are proceeding as we speak right now. It does not mean that we will not do a partnership eventually at the right time. But we are aiming for a shareholder value and to maximize it, and it requires to have this flexibility in mind.

Okay, and last question. The RET 003 trial, or the adolescent trial, is that 003 or 004? 003. Okay. I was wondering how the enrollment's coming on that, and what is the size, if you could remind us.

Yep. We increased the size from, we have had more than 69, so it's going to be more than 69, and we have stated that it will be in the second hour this year, and then enrollment is going well.

All right. Fair enough. All right. Thank you, Chris.

No, thank you.

Thank you. We have a follow-up question from Charles Duncan, Cantor Fitzgerald. Please go ahead.

Hey, Christopher. Thanks for taking the follow-up. I had a couple of questions, one back on the PDD and the other is on RET. Going back to the PDD, you know, your answer before, I'm just trying to figure it out. First of all, do you intend to present the data or more findings from that study in the near term? And then with regard to the genomic analysis, I know that lab function has been a little bit COVIDified, if you will, in the last year. But would you anticipate, call it days or weeks or months? or Quarters in which you'd be able to move forward with perhaps end of phase two meeting with the agency.

Right. So the PDD data will have a lot of data because the entire CDR system has multiple measures. We're talking about a total of, you know, it's a lot of the cognitive domains have been captured in the system very granularly, and there is no total CDR system score, and they all capture different levels of cognitive domains like picture recognition, word recognition, picture accuracy, memory, word accuracy, and short-term memory, long-term memory, and reaction time. Short reaction time, memory reaction time. So there are different levels of cognitive tests which are there. So that is already a lot of measures which we will present. And then comes the entire battery of what we call more participating measures of the Parkinsonian disease, like the UBRS, UBRS 1, 2, 3, 4, and then we have the The actigraphy, the sleep paradigms. We have two different sleep paradigms. And then on top of it, we have the genomic analysis of how the Sigma-1 moves and what it does for patients regarding his Sigma-1 status. But despite that, we are now there to finish this up, and we expect this data to be announced, presented this quarter, this quarter as we speak. and the discussion with the agency obviously will follow up very rapidly once we have that. You have to understand the agency requests a report. The report has to be completed, has to be audited and reviewed and signed, and that basically requires also some additional time. But this is now all done, and this will be all done when we submit to the agency. And so we expect it really to be, I would say, more question of months. Not days, but not too many months. That's probably the best way to describe it.

Okay, that's helpful. And then my follow-up on the REC program, just quickly on the safety database in terms of its sizing, given the range of age groups that you're studying. What has the agency said to you in terms of what's going to be required for that safety database? It is a rare disorder, so I imagine it's not too onerous.

Yeah. So we included in all our RET clinical studies an extension study. So in the RS001, it's a 36-month, 36-week study of extension open label. that was already originally extended before. We have a one-year extension in the RS-002 and also the same one-year extension in RS-003. And given the history, and we believe these are sufficient timelines for safety, for long safety extension, and from the feedback also from the European EU side of the equation, But we believe that what will happen very likely, and that's what Anavex is committing to patients, and that's what we're here for, is that those patients who started a study with Anavex will also have always the chance to continue to stay on a study drug of Anavex 203. So it's very likely we'll also extend these extensions beyond the time period anticipated.

Okay, very good. Thanks for taking my follow-up.

You're welcome. Thank you.

Thank you. And at this moment, I would like to hand the call back to Christopher Mislin.

So thank you very much. And I want to reiterate, we're very excited about our program. We believe we have a really strong pipeline and a platform which allows us to address multiple unmet needs. And in summary, we expect a very data-rich current quota. with data readouts from multiple clinical trials and the remainder of 2021 to be also a catalyst bridge here for Anavex. With that, we look forward to providing further updates as advancements continue and stay tuned. And thank you very much and have a good afternoon. Thank you.

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