Anavex Life Sciences - Earnings Call - Q2 2025

Transcript

Operator (participant)

For today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and during this session, if you'd like to ask a question, please use the Q&A box or raise your hand. Please note this conference is being recorded, and the call will 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. 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 the 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 and ability to obtain future capital, and maintenance of intellectual property rights. I would like to turn the call over to Dr. Missling.

Christopher Missling (CEO)

Thank you, Clint, and good morning, everyone. Thank you for being with us today to review our most recently reported financial results and to provide our quarterly business update. Our portfolio of non-invasive targeted upstream precision compounds continues to advance with special focus on Alzheimer's disease and schizophrenia. We also continue to receive feedback from neurologists preferring convenient, orally available, and clinically meaningful Alzheimer's disease treatment options, which can be assessed without logistical restrictions. In April, we were pleased to present open-label extension data of blarcamesine for Alzheimer's disease at the ADPD 2025 conference. The data confirmed continued clinically meaningful benefit for early Alzheimer's disease patients. Once-daily oral blarcamesine demonstrated over three years of continuous treatment significant amelioration on clinical decline and showed continued clinically meaningful benefit for early Alzheimer's disease patients.

Blarcamesine-treated patients continued to accrue benefit through up to four years, as measured by the clinical endpoints at CDR-SB and ADCS-ADL. Last month, Marwan Sabbagh, Professor of Neurology at Barrow Neurological Institute and Chairman of Anavex Life Sciences Advisory Board, gave an oral presentation titled "Oral Blarcamesine: Novel Mechanism for Alzheimer's Disease: Autophagy Restoration through Upstream Sigma-1 Activation: Clinical Efficacy Phase 2B/3 Trial" at the 9th International Conference on Alzheimer's Disease and Related Disorders in the Middle East. The meeting convened a wide range of healthcare professionals and community advocates from the Middle East and North Africa, USA, Europe, and other countries, with an interest in epidemiology, clinical research, medicine, basic science, and healthcare advocacy related to Alzheimer's disease and related disorders in the region, specifically with an emphasis on region-specific healthcare delivery.

With respect to schizophrenia, earlier this month, we announced the successful completion of enrollment in our phase 2 clinical study of Anavex 371 for the treatment of schizophrenia. The study has enrolled a total of 71 participants, with 16 participants in Part A and 55 participants in Part B. Part A of the study, which investigated multiple ascending doses, has been completed with encouraging preliminary safety and electroencephalography, e.g., biomarker results, previously reported. Part B, which includes more participants and with a longer treatment duration, will provide more comprehensive clinical and biomarker data on the efficacy and safety of Anavex 371 in individuals with schizophrenia. We expect to report top-line data from the study in the second half of this year. Since our last update, we also expanded our scientific advisory board. In April, we announced the appointment of Professor Dr.

Audrey Gabell, a specialist of predictive personalized medicine and digital healthcare in Alzheimer's disease and related disorders, to the Anavex Scientific Advisory Board. Dr. Gabell is a Professor of Neurology, neurologist, and Doctor in Neurosciences at the Memory Resources Research Center, the Rare and Early Dementia Reference Center, and the European Neurodegenerative Excellence Center of Montpellier University, France. Dr. Gabell is also a researcher at the Montpellier Institute of Neurosciences and member of the European Alzheimer's Disease Consortium. I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a financial summary of the recently reported quarter.

Sandra Boenisch (Principal Financial Officer)

Thank you, Christopher. Good morning to everyone. I'm pleased to share with you today our second quarter financial results for our 2025 fiscal year. Our cash position on March 31 was $115.8 million, and we had no debt. During the quarter, we utilized cash and cash equivalents of $5.9 million in operating activities after taking into account changes in non-cash working capital accounts. As of quarter end, we anticipate at the current cash utilization rate and ranges a runway of approximately four years. During our most recent quarter, general and administrative expenses were $2.6 million as compared to $2.9 million for the comparable quarter of last year. Our research and development expenses for the quarter were $9.9 million as compared to $9.7 million for the comparable quarter of last year. Lastly, we reported a net loss of $11.2 million for the quarter, or $0.13 per share.

Thank you, and now I will turn the call back over to Christopher.

Christopher Missling (CEO)

Thank you, Sandra. In summary, we are focused on continuing to advance our precision medicine compounds with a special focus on Alzheimer's and schizophrenia. We are excited to be potentially making a difference for individuals suffering from these diseases by presenting a scalable treatment alternative alongside the ease of oral administration. I would now like to turn the call back to Clint for Q&A.

Operator (participant)

Thank you, Christopher. We will begin the Q&A session now. If you have a question, please raise your hand or enter it in the Q&A box. It looks like our first question is coming from Soumit Roy from Jones Research. I think you can go ahead, Roy.

Soumit Roy (Managing Director)

Morning, everyone, and congrats on all the progress.

Christopher Missling (CEO)

Thank you.

Soumit Roy (Managing Director)

Quick question on the Alzheimer front. What can you tell us about the timeline around when you expect to hear back from EMA and if you already had some mid-cycle review comments received from the European agency?

Christopher Missling (CEO)

Thank you for the question. We expect to have, from what we compare to other regulatory review cycles, that it would probably take about 12 months. We submitted in November last year, and it was accepted, the submission in December last year. It is probably prudent to estimate by the end of this year or early next quarter that we would get a feedback. I also want to point out that we will not be able to give interim updates, but we will report the decision from the EMA in its final form.

Soumit Roy (Managing Director)

Got it. That's really helpful. Second one is for 2025. What do you see as the key inflection points? Is it the schizophrenia data that's coming up in the second half? If you can give us a little bit more details on the trial, the patient characteristics, and what would be the bar to beat in these patients?

Christopher Missling (CEO)

Thank you for the question. I think the phase 2 study in schizophrenia is the first efficacy study of 371. It is a safety study preliminarily. We also focus in the study on the biomarker effect. We would be very pleased to see a biomarker effect of the drug in these patients, which are very hard-to-treat patients. There is a lot of unmet need out there still today, especially with the negative symptoms. That will be the focus of the trial for the time being. We also included some clinical measures, but the focus is really on the safety for the longer duration, as well as the biomarker effect of the drug in the brain of patients who are using EEG, which has been now validated as a potential biomarker for schizophrenia in these patients.

Soumit Roy (Managing Director)

Thank you so much again for taking the questions.

Christopher Missling (CEO)

Thank you.

Operator (participant)

Thank you, Soumit. It looks like our next call comes from Tom Bishop from BI Research. Tom, I think you're active now, but you just need to unmute.

Tom Bishop (Founder and Editor)

All right. Can you hear me now?

Operator (participant)

Yep. That's perfect. Thank you.

Tom Bishop (Founder and Editor)

All right. Sticking with the schizophrenia trial, you mentioned a longer duration, but I didn't quite understand what that meant.

Christopher Missling (CEO)

The schizophrenia trial is separated in two parts. Part A was a short period of single ascending doses, and Part B is a longer duration of 28 days. It is almost a month. That is what I was referring to, that the Part B, which includes 55 patients randomized to placebo or active arm one-to-one, will give us a probably more solid picture of the drug effect in these patients.

Tom Bishop (Founder and Editor)

I kind of meant how many weeks or months.

Christopher Missling (CEO)

It's four weeks, 28 days.

Tom Bishop (Founder and Editor)

Oh, okay. Okay. Can you go into a little more detail about what the company is doing pre-possible launch of blarcamesine in Europe?

Christopher Missling (CEO)

Right. We have initiated, since JP Morgan, multiple discussions with potential partners in discussing if so, the drug is available to patients in Europe to move forward quickly with the distribution, with the providing access to the drug in Europe. We also have discussions with CROs, who also provide us, as an alternative, confidence in the ability to have Salesforce set up to move forward also in an independent way if this would be more advisable from a value creation point of view. We like to maximize shareholder value. The decision is, whatever maximizes shareholder value will be the decision how to progress. We are on these fronts active on being ready if so, we need to be ready.

Tom Bishop (Founder and Editor)

Okay. That's helpful. So basically, the choice is to partner with a major or somebody active in Europe or to go with a European-based clinical sales team.

Christopher Missling (CEO)

These are the options. That's correct. If so, the drug was approved.

Tom Bishop (Founder and Editor)

Okay. Now, what's being used in the schizophrenia trial? That's A371. So is that a—I mean, that's different from blarcamesine, right?

Christopher Missling (CEO)

That's correct. Anavex 371 is a completely different molecule. It comes from a different approach and has different affinities to Sigma-1 receptor. That is completely independent of blarcamesine, which is called Anavex 2-73, and it's the drug which is called blarcamesine. There are two different drugs.

Tom Bishop (Founder and Editor)

Okay. That's right. What are the other countries that might piggyback on a European approval? Secondly, how are you doing with the FDA, Canada, Australia? Could you cover that?

Christopher Missling (CEO)

Yep. Very good question. The other countries who are piggybacking on approvals in regions like Europe, EMA would be, I think, the entire rest of the world: South America. This would be Africa. This would be the Middle East. This would be some countries, I think, also in the Asian region. This would be a large number of population as well. Regarding the U.K. and Canada, we also are planning to proceed in Australia. We're planning to proceed with starting the dialogue with the respective regulatory bodies in parallel this year.

Tom Bishop (Founder and Editor)

Are you waiting for word from Europe first? Because I know the FDA has been kind of a possible—to have a discussion with them.

Christopher Missling (CEO)

That's also the plan, correct. We are planning to discuss with these authorities in parallel. This is in parallel, I would say, is the best way to describe it.

Tom Bishop (Founder and Editor)

We're not waiting for the results for Europe first, or are we?

Christopher Missling (CEO)

We could wait, but it's probably also possible to work in parallel to prepare the discussions. That does not mean it's a submission, but to initiate the discussions and to get the feedback on the respective authorities. That's what we did with Europe as well. Remember, we had our first initial discussion with European authorities and led to the feedback to submit.

Tom Bishop (Founder and Editor)

Are any of those planned, though, yet? Or still working on it?

Christopher Missling (CEO)

Pardon me?

Tom Bishop (Founder and Editor)

Are any of those planned yet? Or we plan to meet with Canada next month or anything like that?

Christopher Missling (CEO)

We will update once we get feedback. It is too early to provide details on the timing of those discussions. Once we have a relevant outcome of these and meaningful outcome, we will update you.

Tom Bishop (Founder and Editor)

Okay. If Europe gave, say, an approval in November, just to pick a number, how long would it take for the company to see revenue? In other words, the launch process.

Christopher Missling (CEO)

Yeah. In Europe, the approval is per all the entire European Union, and the sales is done per country. Certain countries, you're allowed to market the next day. In other countries, you need to first reach an agreement on when to proceed on the timing of the first sale. It varies. Some countries, you can start right away.

Tom Bishop (Founder and Editor)

You'd be in a position, I mean, to have revenue in the March quarter, are you saying? Or it takes six months to get going?

Christopher Missling (CEO)

Yep. I cannot foresee right now. There might be some logistical questions. If we are getting close to this, we will be very likely prepared. That's our working assumption.

Tom Bishop (Founder and Editor)

My last question is, where is the drug being manufactured, and do you have a launch inventory?

Christopher Missling (CEO)

We have a large inventory for a launch. That is correct. The drug is manufactured by the largest US manufacturer.

Tom Bishop (Founder and Editor)

Is there any tariff impact?

Christopher Missling (CEO)

It's crazy, but.

Right. We don't have any visibility on that right now.

Tom Bishop (Founder and Editor)

Okay. All right. Thank you very much.

Christopher Missling (CEO)

Thank you.

Operator (participant)

Thank you, Tom. There's another question here, Dr. Missling. What would be the advantage of oral blarcamesine for patients?

Christopher Missling (CEO)

I think the advantage for the patient for blarcamesine would be that they're being helped timely without delays and constraints by cumbersome or limiting inconvenient complex diagnostic procedures. It would allow for quicker time-sensitive access, which continued focus on the individual patient. When we compare this to the antibodies, it takes up to sometimes six to nine months once they have been diagnosed and been seen by the doctor before they even get to the chance of getting the drug. By then, they might move into a different bracket from a pathological severity point of view. It might not be even any more eligible to that drug.

In our case, a patient could be visited by a physician, and the patient would be identified as Alzheimer's patients right away, and the physician would prescribe him blarcamesine potentially, and he would leave with that prescription for three months and be told to come back three months later. So that's the difference, possibly.

Operator (participant)

There was a follow-up. Is there any difference? I know you kind of touched on it, but similar advantages to family members or physicians?

Christopher Missling (CEO)

Yeah. So the advantage for the family would be there's less caregiver stress and likely less financial strain. There's no need to arrange for constant transportation to a hospital to measure an MRI or measure a PET scan. Also, there's no impact because of that on the family member's own work schedule, which is not to be underestimated. Some people cannot just take off work to bring grandmother or grandfather to the hospital every three weeks or every two weeks. That's a big problem. Regarding the physicians, the advantage for the physicians would be that there's no logistical barrier for treatment and no need to arrange for complex invasive PET scans or lumbar puncture, which is spinal taps and/or repeated MRIs. Basically, everybody has less logistical challenges to overcome, and the patient is helped right away.

When you remember the outcome of the long-term extension study presented at ADPD at the conference, we demonstrated that if you delay the treatment of blarcamesine, you delay also the long-term benefit. You basically prevent the patient from staying on a better quality of life level, which has implications for benefit for dealing with his own life and family interaction. If you delay this, you basically are preventing this to happen. It is important to give the drug to the patients once identified as Alzheimer's patient as soon as possible.

Operator (participant)

Okay. Thank you very much. I think that's the end of the questions here. So I'll turn it back over to you to close.

Christopher Missling (CEO)

Thank you. In closing, we continue to focus on execution and commercial readiness as we advance our therapeutic pipeline to potentially improve patients' lives living with these devastating conditions. Thank you very much.

Operator (participant)

Thank you, ladies and gentlemen. That'll conclude today's conference call. We appreciate your participation, and you may now disconnect.