Anavex Life Sciences Corp.

Welcome to the Anovex Life Sciences Fiscal 2021 fourth quarter conference call. My name is Adrienne and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session. During the question and answer session, if you have a question, please press star then one on your touch-tone phone. Please note this conference call is being recorded. I'll now turn the call over to your host, Clint Tomlinson. Clint, sir, you may begin.

Thank you and good afternoon, everyone. We appreciate you joining us today for Anavex Life Sciences' fourth quarter conference call to review financial results and discuss the company's business updates. A taped replay of this call will be available after the call, and the call will also be available for replay on Anavex's website at www.anavex.com. With us today is Dr. Christopher Misling, President and Chief Executive Officer, and Sandra Boenisch, Principal Financial Officer. Following management's remarks, there will be a question and answer session. 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. 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 may 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 an 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 really appreciate everyone joining us on today's conference call to review our most recently reported financial results and to provide a business update. We concluded an exceptional fiscal year 2021 while continuing our momentum. highlighted by the efficient execution and full enrollment of three precision medicine clinical trials, including the Phase 2b-3 Anavex 273 clinical trial in Alzheimer's disease, the Avatar 273 clinical trial in Rett syndrome, as well as the Phase 1 study of Anavex 371, starting with our lead drug candidate, 273. We expect top-line results from the second placebo-controlled avatar study for the treatment of our patients with breast syndrome, which are expected to be announced around calendar year end 2021. This study took place in Australia and the United Kingdom using a higher dose than the U.S.-based Phase II study and enrolled 33 patients over a seven-week treatment period, including Onodex273-specific precision medicine biomarkers. Topline results from the placebo-controlled excellence phase 2-3 study for the treatment of patriotic patients with Rett syndrome are expected in the first half of 2022. This phase 2-3 study in patriotic patients with Rett syndrome age 5 to 18 will evaluate the safety and efficacy of 273 in approximately 84 patients over a 12-week treatment period, including 273 specific precision medicine biomarkers. Regarding our Alzheimer's disease program, top-line results from the placebo-controlled Phase II B-3 ANAVEX273-AD004 study for the treatment of Alzheimer's disease are confirmed and are expected in the second half of 2022. The double-blind, placebo-controlled 509-patient late-stage Phase II B-3 study in patients with Alzheimer's disease exceeded enrollment of the targeted patient number of 52 sites across North America, Europe, and Australia using ADAS-COG for cognition and ADCS-ADL for activities of daily living and function as primary endpoints. This multicenter double-blind clinical trial is measuring efficacy, tolerability, and safety of two different once-daily oral 273 doses or placebo. As reported last month, The Independent Data Safety Monitoring Board for the company's Phase 2b-3 study completed its most recent pre-planned review of the preliminary Phase 2b-3 study data in Alzheimer patients. As specified in the protocol, the DSMB reviewed the interim safety data for the 273 Phase 2b-3 under Alzheimer disease clinical study and its open label extension, Attention-AD study. Upon review of the interim safety data, that these will be recommended to continue the study without modification. And we're very excited also to report that the top line data from another pipeline compound, Anavex 371, which had received orphan drug designation by the FDA for thrombosis of blood dementia, a placebo control phase one study in Anavex 371, evaluating Anavex 371 in humans are expected around calendar year end 2021. During 2022, we will also move in closer to further expanding the pipeline for 273 using gene biomarkers of response, applying precision medicine for another neurological disorder with unmet medical needs, including a planned initiation of 273 imaging focus, Parkinson's disease clinical study, a planned initiation also of a phase two slash three clinical trials for the treatment of a new rare disease indication and lastly, a planned initiation of a physical phase 2-3 study in Fragile X syndrome, the most frequent genetic cause of autism spectrum disorder. In Fragile X, we recently announced in August of this year, strong clinical data of 273 in Fragile X syndrome published in the peer-reviewed journal Scientific Reports. The study evaluated 273 in FMR1 knockout mice are validated animal models for the disease, which resulted in the reversal of hyperactivity and restoration of associative learning. Furthermore, 2-7-3 demonstrated dose-dependent sigma-1 receptor occupancy in a positron emission tomography PEP study. And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer, Self-Linux, for a brief financial summary of the recently reported year-end.

Thank you, Christopher, and good afternoon to everybody. We continue to maintain a strong balance sheet and fiscal responsibility. Our cash position on September 30th, 2021 was $152.1 million, which we believe is sufficient cash runway to fund operations and clinical programs beyond 2025. During fiscal 2021, cash utilization and operations was $30.4 million. We reported a net loss of $37.9 million for the full fiscal year, which is $0.54 per share as compared to $26.3 million or $0.45 per share in the comparable year 2020. Research and development expenses for the year were $33 million compared to $25.2 million for the comparable fiscal year. The increase is primarily attributable to the continued advancement of our ongoing clinical trials, most notably the full enrollment of our international Phase 2B-3 Alzheimer's disease trials and the related open-label extension, and the continued enrollment and advancement of the Rett Syndrome studies and expansion of these trials internationally. General and administrative expenses were $9 million for the year, as compared to $5.9 million in the prior year. The increase is mostly significantly associated with an increase in personnel and associated non-cash stock option compensation charges. Thank you, and now I'll return the call back over to you, Christopher.

Thank you, Sandra. And as we look to the remainder of 2021 and into 2022, I'm very excited about the company's potential as we continue to advance and expand our precision medicine treatment programs. As we look ahead, we will continue to focus on driving meaningful growth across our broad Sigma-1 platform portfolio to deliver transformational treatments for patients with both degenerative and developmental neurological disorders around the world. So we look forward to providing further updates as we advance and continue And at this point, I'd like to also wish everyone a happy Thanksgiving. I would like now to open the call for questions. Operator, please go ahead.

Thank you. You will now begin the question and answer session. If you have a question, please press star then 1 on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you're using a speaker phone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then 1 on your touchtone phone. And our first question comes from Charles Duncan from Cantor Fitzgerald. Your line is open.

This is Pete Stavropoulos for Charles. Good afternoon, Christopher and team, and congratulations on the progress and appreciate all the updates. I have a couple of questions regarding Rett syndrome. When you think about the efficacy measures that were made and the efficacy seen in the U.S. adult study, How do you feel about the sample size or the planned effect size out of Avatar and also the excellence study? And we saw that you upsized the sample size for excellence from 69 to 84 subjects. What drove that decision? If you can give us some color on that.

I appreciate it and thank you. So the efficacy effect size was really significant in the and the first US study which was using a low dose, as you remember, and the effect size was in the range 1.3 to 1.3 CoMd, which is considered very large. And since we expect those response based on higher doses, we basically are inclined to believe that the second study, the Avatar study, might show a similar, if not higher, effect size. given that we're using a higher dose in the Avatar study compared to the US study. The extension of patient number in the Excellence study from originally 69 to 84 was based on a request, a regulatory request to also have an additional sub-analysis of the number of the patient in different age groups. for example from 5 to 18 to also have an additional analysis of patients from 5 to 12 and then from 12 or 13 to 18. In order to make sure we have enough power for this additional calculation, we thought it is prudent to just add additional number of patients which ended up to the total number of 84 as we communicated.

Thank you. Very helpful. We also saw that you made a few changes to the primary and secondary endpoints in the excellent study. Can you help us understand what drove those decisions? Was it a result of advice or interactions with the FDA or any other regulatory agency?

Right. So we have noticed that the RSPQ is really the most rigorous endpoint. It is really going through 45 very dedicated questions and detailed questions which can be answered very precisely. There's also the ability which we have seen and we have demonstrated that in our presentation of doing sub-analysis of the sub-scores of the entire score, the RSPQ score. However, when we looked at the CGI, we noticed that there was a weaker ability to make this because it's really a global assessment. and it also has a very known and it's published weak, I would say, reliability. But we basically are including that still, but we didn't want to overemphasize that score. So that was the background for the focus on the RSPQ.

All right, thank you. And my last question with regard to the Parkinson's Disease Dementia Program. Can you provide any updates on that program? Have you met with the agency to discuss it? Or do you plan to?

Any time in the near future? Yes, we plan to do that. We actually are in the process of now discussing the data with the foundation and we are expecting to get valuable feedback for input on the design of pivotal studies for Parkinson's. and also Pivotal Study for Parkinson's and Dementia. And with that, you know, in our package, if you so like, we then feel more robustly educated and fully informed to go to do the discussion with the agency about a proper pivotal study in the respective two indications.

Do you think by some chance you're going to wait for the imaging study results or it'll

This will be before the imaging study, but definitely we are still including, which we have not yet reported, the total gene analysis of the PDD study. So that means we've not only looked at the sigma-1 gene expression changes of the mRNA, but also the gene expression of all genes of all participants, that is in the active arm as well as in the placebo arm, and we believe that additional intelligence can be drawn out of that to make an informed design of a study which increases further the chances of a pivotal study down the road.

All right, thank you. Thank you very much for taking my questions and congratulations again on the progress and happy Thanksgiving.

Likewise, I appreciate it.

And the next question comes from Ross. from H.T. Wainwright. Your line is open.

Hi, Chris and team. This is Mazon Faram. Congrats on the progress, and thanks for taking our questions. So firstly, how early in 2022 do you envisage filing an NDA for Blanc-Carmazine in rat syndrome, providing you a positive result from the three trials?

It's really, I would let the data first come out, and then we can talk about that. But obviously, Thank you.

And then with regards to 273, what learnings are you transitioning into your fragile X syndrome development? For example, are you planning on cross-analyzing data from the Rett syndrome and the fragile X syndrome trials, given that the two syndromes sort of share overlapping symptoms as well as underlying cellular mechanisms?

That's exactly right. There are two pockets here to look at. One is the preclinical pocket and we see a very strong response in the animal model of a fragile X and leading to even the reversal of the pathology. And then we look also at the clinical study of the Rett syndrome and we see that the phenotypes are overlapping between these two indications. and there are some endpoints which are included in the Rett syndrome study. For example, ADAMS is one of them and that had been responding very well with the drug and we believe this could be also used as a key measure for the Rett syndrome, for the Fragile X study since that has been also even used prior in Fragile X study as a primary endpoint. The decision is not yet made exactly about how to use that endpoint, but this could be one potential venue.

Very helpful. And we read with interest your recent published paper in Expert Opinion on Therapeutic Targets, where you described 273 and 371 as hand-in-hand targets for Alzheimer's disease. We were wondering if you've, number one, benchmarked these drugs together preclinically, and number two, tested a combination. If not, do you plan to do so?

So the two compounds came from different angles in different labs, but they are now moving more into what we call, we try to learn as we go. But so far, we could not find a comparable assay other than a very early preclinical assay of target engagement. And there are differences in the affinities of the sigma-1 receptor and also difference to the muscarinic receptor, which we believe is also important. and ultimately we will be only able to see really the difference of the two if we run really both drugs in the same indication in the same trial. So we think that each drug has its own merits and it could very well be that 371 is really good at focusing more on frontotemporal dementia which we have often designation for and could also be very good at Alzheimer's, but right now we have 273 more advanced, so we will eventually find out.

Appreciate the color. And then just finally, you've talked about 273 using it in a prophylactic manner. We saw a recent Science Advances article which describes and many more. Thank you very much.

The most efficient way to incubate or inoculate this disease and since our preclinical data indicates that potential which was done very successfully in animals that who got the drug before they got injected with a toxic A-beta load and they never developed the symptoms of Alzheimer's disease so there's really high Thank you very much. Next question comes from

Jones Trading. Your line is open.

Hello, everyone, and thank you for taking the question. Could you give us a little color on the upcoming adult rep study? So, as I understand, there will be different dose cohorts. So, could you give us an idea of the size, and is there going to be intra-cohort dose escalation? What should we expect?

Yeah, so let me explain it. There is not a different dose. It's just a target dose is higher than the U.S. study. So there's only one dose and one placebo arm. And that one dose will be a target dose. So that is just higher than the U.S. study.

So there will be not multiple doses technically. It's just one higher dose. Okay, correct. So you're not disclosing if it's going to be 10, 20, or 30? Right. We will find out when we disclose the data, and then we will be able to learn about that. Got it. And any color on the Alzheimer trial, what are you planning as patients are coming out of these 48 weeks? Are they going to go into maintenance trial, or what is the plan there?

Right. So we have an extension study called Attention AD, which is a two-year study of following up as our open label after the 48 week which has started you know after the first patient finished the 48 weeks and because these patients have actually some of them finished this phase two open label extension they had requested to continue to stay on study drug and so what we did we initiated and were successful in expanding now this attention AD study open label extension from two years to actually three years. So patients who finished the study, placebo control study, entered into the extension study, finished the two years, will now continue to go into the third year. And that is because of requests by the patient, the caretaker, and the physician. And also I'd like to add that I'd like to add also that the conversion from the placebo-controlled part of the study to the open label is very high. It's above 94% currently, which is a good sign.

Great. That is really good to hear. One last question. Back to the REC program, where are you with AFD on the conversation turning whether these are going to be the registration trial data and

It's really a question now of the data, and the data has to speak for itself. And we also said it's a potential pill study, so the word really weighs in. And the data really will determine this, how this will be looked at. We have to point out that for adults, there is no treatment available, and the patient population is also harder to to bring into the trial because they're more advanced. They also are, because of the disease early passing on, there are not that many patients available to find in a trial. So the focus is really on the patriotic study for that reason, but still there's an unmet need for patients of all ages for Rett syndrome.

So we could expect you could even start a rolling submission with the adult trial, and if need be, that could be approved first before the pediatric really gets filed.

I would say it cannot be excluded, but I cannot promise it either. So that's why I said we would have with avatar study and the U.S. RET study two independent placebo-controlled studies in a rare disease, which usually is beyond the request from for rare diseases usually. So this would be, if successful, a very powerful package.

Got it. Congratulations again on all the progress and Happy Thanksgiving. Happy Thanksgiving. Thank you.

And our next question comes from Yun Zong from BTIG. Your line is open.

Hi. Thanks very much for taking the question. So the first one is on Rett syndrome. and so the definition of a responder is that on each efficacy endpoint is that going to be the same in pediatric patient as compared to an adult patient and also the definition of a responder is that consistent with how clinicians are viewing as clinically meaningful improvement?

That's correct. It's consistent with the first study and then consistent with the assessment of physician. That's correct.

Okay. then I think I didn't see an update on the 371 program in 2020 sorry 2022 in terms of upcoming milestones so just wanted to check if frontal temporal dementia is still going to be the first indication for that program and when do you expect a study potentially to to start right so we have mentioned that we would move ahead with prototype dementia but we'd like to have really the solid phase one data in hand

before we say we commit to this, but we definitely will move forward with FDD or any other related dementia indication.

Okay. And then on the pipeline, I think, well, it's very encouraged to be able to target multiple indications, but just wonder which indications do you think you would like to prioritize going forward? Of course, the Rett syndrome is going to be the lead indication, but Which indication do you think might be suited for partnerships?

So we believe that we have with the rare disease franchise, which is RAD syndrome, Fragile X, and others, the ability, and it's not been the first time that a company has built this into a commercial entity with rare disease, targeting rare diseases. So that seems to be very doable. It comes to the indication like Alzheimer's disease and Parkinson's disease, which requires also the involvement of detailing, general practitioners, physicians of general physicians, then it might be more powerful to penetrate the market with the support of a large pharma partner and at the right time to make sure that we retain most upside for Anadex and Farwa Shelders, this will be done at the right time and not prematurely to give up too much of the upside. But it is no doubt that these large allocations require additional support.

Okay, great. Thank you very much and happy Thanksgiving. Thank you, likewise.

And our next question comes from Paul. Your line is up.

Likewise.

Thank you. And that concludes the question and answer portion. And that also concludes the conference call. Thank you for participating. You may now disconnect.