Anavex Life Sciences - Q3 2024

Transcript

Clint Tomlinson (Head of Investor Relations)

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the session, if you would 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 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. With that, I'd 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. We continue to meaningfully advance our differentiated precision medicine clinical program, highlighted by the recent presentation of comprehensive results from the phase 2b/3 clinical trial, blarcamesine, Anavex 2-73, which were presented at the Alzheimer's Association International Conference, AAIC, showing that oral once-daily blarcamesine significantly slowed clinical decline for early Alzheimer's disease, patients with good comparative safety profile and no associated neuroimaging adverse events. Full data from the blarcamesine study in Alzheimer's disease phase 2b/3 placebo-controlled clinical trial will be published in an upcoming peer-reviewed journal. The initiated process for submitting a Marketing Authorisation Application, MAA, to the European Medicines Agency, EMA, under the centralized procedure is underway, with full regulatory submission of blarcamesine expected in Q4 of 2024.

The marketing authorization would allow direct market access throughout the European Union for oral blarcamesine for the treatment of Alzheimer's disease. There are an estimated 7 million people in Europe with Alzheimer's disease, a number expected to double by 2030, according to the European Brain Council. Analysis of RNA sequencing, RNA-seq, which would reveal which genes are actively transcribed, or in other words, expressed in Alzheimer's patients, in comparison between placebo and blarcamesine of the placebo-controlled phase 2b/3 blarcamesine trial in early Alzheimer's disease, is underway. This data might have relevant value since it may provide insight into Alzheimer's disease pathology and how cells function in the presence of placebo or in the presence of blarcamesine, respectively. Interim data is expected in the second half of 2024. In June, we completed the last patient, last visit in the ATTENTION-AD open-label extension 96-week trial.

Interim data from this trial is expected in the second half of 2024. The recent AAIC 2024 meeting resulted in constructive feedback, coupled with enthusiasm around our Alzheimer's disease program, strengthened by the recent addition of an experienced clinical team, which support Anavex future plans. Educational outreach will continue as we work towards MAA submission and beyond. We are also pleased to report that the clinical team continues to beat the planned timelines in the ongoing phase 2 clinical trial of Anavex 3-71 in schizophrenia patients. We have completed dosing of the first cohort and are nearing the completion of enrollment of the second cohort of schizophrenia patients in Part A of the trial.

In Parkinson's disease, initiation of Anavex 2-73 phase 2b/3, an over six-month trial, including biomarkers, which we believe may be key for understanding drug effects on Parkinson's disease pathology and account for the recently changing context in the field of Parkinson's disease, is expected in the second half of 2024. In Rett syndrome, an educational presentation was provided at the 2024 IRSF Rett Syndrome Scientific Meeting, going from June 18 to June 19, 2024, which demonstrated the commitment of Anavex to the Rett syndrome community through direct engagement with patients and families. Positive and supportive feedback was received from families and investigators about the continued Anavex Rett syndrome program. Regarding Fragile X, new disease-specific, translatable, and objective biomarker data generated with Anavex 2-73, supporting the initiation of the Anavex 2-73 phase 2/3 clinical trial, was presented at the 19th NFXF International Fragile X Conference.

Meeting with the NFXF leadership team strengthened Anavex's relationship with the community, coupled with an increased awareness of Anavex Fragile X syndrome program by engaging with patients and families in attendance. We are also expecting the initiation of Anavex 2-73 Phase 2/3 clinical trial in a new rare disease in the future. Finally, we are building medical affairs capabilities to expand education and physician support activities to ensure optimal medical impact, including continued clinical publications involving Anavex 2-73 and Anavex 3-71. And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for our financial summary of the recently reported quarter.

Sandra Boenisch (Principal Financial Officer)

Thank you, Christopher, and good morning to everyone. I'm pleased to share with you today our third quarter financial results for our 2024 fiscal year. Our cash position at June 30th was $138.8 million, and we have no debt. During the quarter, we utilized cash and cash equivalents of $5.2 million in operating activities after taking into account changes in non-cash working capital accounts. At our current cash utilization rate, we believe we have a cash runway of approximately four years. During our most recent quarter, general and administrative expenses were $2.9 million, as compared to $2.8 million for the immediately preceding second quarter. Our research and development expenses for the quarter were $11.9 million, as compared to $9.7 million for the immediately preceding second quarter. And lastly, we reported a net loss of $12.2 million for the quarter, which is $0.14 per share.

Thank you, and now back to you, Christopher.

Christopher Missling (CEO)

Thank you, Sandra. In summary, we remain dedicated to developing medicines for individuals suffering from brain disorders within neurodegenerative and neurodevelopmental disorders, which could further expand our differentiated precision medicine platform to deliver scalable treatments coupled with convenient oral dosing. I would now like to turn the call back to Clint for Q&A.

Clint Tomlinson (Head of Investor Relations)

Thank you, Christopher. We'll now begin the Q&A session. If you have a question, please raise your hand or enter it into the Q&A box. The first question comes from Tom Bishop, BI Research. Tom, you should be-

Tom Bishop (Analyst)

Hey, you hear me now?

Clint Tomlinson (Head of Investor Relations)

Yep. Great. Thanks, Tom.

Tom Bishop (Analyst)

Okay, I had a couple of questions. What are your plans to meet with the FDA or regulators in Asia, which you also alluded to recently, as you did earlier with EMA? And has a date been set for either, or is there some sort of a hold up or additional data you're waiting for?

Christopher Missling (CEO)

Thank you for the question. There's no hold up. There's only the focus right now on the EMA submission, which takes a lot of resources. We have to submit and put together a package of many modules, which can be so many pages and documents, so we focus on that. But the time will come, we don't know yet when, to also meet regulatory bodies around the world, including the agency in this country as well.

Tom Bishop (Analyst)

Oh, okay. With regards to the recent presentation at the AAIC, of the Phase 2/3 data, the question comes up with regard to varying number of patients included in different measures that the company presented. And I have assumed that it's just simply due to the fact that you can't force patients in the trial to come in and take certain tests, especially more invasive ones, and that this explains it. But of course, the dark side likes to claim cherry-picking. So can you discuss this aspect and put the issue to rest, you know, as to whether you do anything with the data that's given?

Christopher Missling (CEO)

May I understand better, you talk about the number of patients in each visit, scheduled visits?

Tom Bishop (Analyst)

in the different things like Cog 13 and whatever that you presented to the AAIC.

Christopher Missling (CEO)

Yeah, so the number of visit-

Tom Bishop (Analyst)

The number of patients from some of these-

Christopher Missling (CEO)

Time points

Tom Bishop (Analyst)

Do you understand?

Christopher Missling (CEO)

Visit time point. Yeah. So this is a... There is no other way to explain it, that every patient does not always present at the time point in question. He can skip, he can be impaired because of COVID, and this trial was during COVID. It's very normal. You just have to then always account for when you have a data point, and that's exactly described in the presentation. And when you look up other papers from Aduhelm, from lecanemab, donanemab, they are exactly the same. Every number is different at every time point because they are not always the same amount of patients attending the visit, so that's a very common procedure.

Tom Bishop (Analyst)

But you use the data exactly as given to you by the biostatistical firm, and who was that?

Christopher Missling (CEO)

Yeah, of course. There is no other way than to take every available data point. There is no other way to do that other than that.

Tom Bishop (Analyst)

Okay, and I wanted to clear up or confirm for myself the so-called, you know, the $150 million stock offering that the various news headlined, that was just a shelf offering to be used as needed opportunistically in the future, correct?

Christopher Missling (CEO)

So the company has been extremely cautious with financing. We've been very conservative. While other companies spent a ton of money, we've been very diligent on being very cautious with our, you know, fiscally responsible behavior. So what we did was just to make sure that one day in the future, when we do need more resources for market entry or other reasons, that we have that in place. So it's not meant to be used today or tomorrow, but the opportunity could arise, but it was just to put in place something so we have it in place for the future.

Tom Bishop (Analyst)

Okay, and regarding Rett, is there a date to initiate another Rett trial, or, well, I'm not sure what was going on there?

Christopher Missling (CEO)

So we have had very good feedback from the conference, as I mentioned, and there's no date yet, but we proceed, as we stated, to do a larger study for Rett syndrome as well.

Tom Bishop (Analyst)

Okay, and finally, with regards to Fragile X, was there a phase 1? You mentioned going to a phase 2b/3, I think, and

Christopher Missling (CEO)

The phase 1 was done with blarcamesine, with Anavex 2-73 already, so we can start into a phase 2 because of the phase 1 was already done prior to this, because of the drug was already tested in human healthy volunteers.

Tom Bishop (Analyst)

Okay, and actually, I had one more. With regards to schizophrenia, can you remind us a little more or explain the first cohort, the second cohort, part A?

Christopher Missling (CEO)

Yep.

Tom Bishop (Analyst)

Is there a part B? I mean, could you just run through that again?

Christopher Missling (CEO)

Sure. So part A is single ascending doses. So we test the tolerability and of the patients for the first doses, a lower dose and a higher dose subsequently, and the second higher dose is now almost completed enrollment. And the part B will be a longitudinal study run about, I think it's 28 days or so. So the drug will be given at the dose, which will be considered the best tolerated dose, and we will then observe patients over a longer period of time.

Tom Bishop (Analyst)

So the second dose is the higher dose?

Christopher Missling (CEO)

The second dose-

Tom Bishop (Analyst)

Yeah

Christopher Missling (CEO)

... from part A is the higher dose, and part B will be the dose which we choose.

Tom Bishop (Analyst)

Right

Christopher Missling (CEO)

... once it starts, and it will be a longer trial of 28 days or 4 weeks, basically.

Tom Bishop (Analyst)

All right. Thank you.

Christopher Missling (CEO)

Thank you.

Clint Tomlinson (Head of Investor Relations)

Thank you, Tom. Our next question comes from Soumit Roy at Jones Research.

Soumit Roy (Analyst)

Good morning, everyone, and thank you for taking the question, and also congrats on executing on multiple fronts. On the AAIC data, Alzheimer's disease, could you give us a little color, make us understand on the dose dependency or the clear lack of dose dependency between 30 mg and 50 mg? There was ADAS-Cog working a little better for the 50 mg versus CDR-SB for the 30 mg. And the discontinuation rate, so what % of the 50 mg did you see had to scale back to 30 mg because of adverse events in the open-label extension?

Christopher Missling (CEO)

So let me talk, address the first question first. So the two arms are dose groups, and we use also the expression for that reason. When you read our description and the presentation, we talk about the dose groups, 30 mg dose group or 50 mg group. So since we allow titration to the best tolerated dose for those two arms, as well as the placebo, by the way, we basically realized that the end of the day, the target dose for most patients was relatively close to each other in those two arms. So while in the 50 mg group, there were some with 50 mg, there were also some with 30. So it was a bit higher than the 30 mg group, but not by much.

So they're pretty much close, and that's why I also pre-specified the two arms together against placebo in a predefined analysis. So that was the background. So we have seen prior to that, a dose response curve in our phase 2a, so there's no doubt about it, the dose response is confirmed. But what we now notice is that in this trial where we... And that's coming to the second part of the question, where we notice, where we force patients to uptitrate to the target dose, 50, very quickly, within 2 weeks and then to 3 weeks, we noticed that didn't was very well received. Some patients had some dizziness, and they wouldn't feel comfortable about it. So because they are not impaired patients, they're early Alzheimer's, they felt saying, "Maybe we have COVID.

I don't want to continue this." It was during the time of COVID, of course, as well. So that's why we had some dropouts at the higher dose, more than in the lower dose group. So what we now realize when we did the open label study, where we allowed a more, I would say, lenient and less stringent way of up-titration, in also allowing patients to take the drug at nighttime instead of in the morning, which we've basically forced patients to take during the trial early in the morning. So we noticed that there was much higher tolerance for either dose, 30 or 50, as long as they were allowed to get used to the drug for a longer period of time. And we noticed it also in the...

In the compassionate use program, where there's extremely high tolerance with allowing patients to titrate to a, to 50 or 30, as long as they have enough time to do that, and then taking also nighttime dosing. So we don't see the adverse events we have seen in this trial, because we basically forced them to titrate so quickly up to the target dose. We also have to point out that it's actually a clearly manifestation of a manageable and addressable adverse event. It's not like, when you look at brain bleeding or brain swelling from the antibodies, which we don't have, that no matter how you take the drug, you always will have 30% or more of patients with that very dangerous side effects of a drug, of an antibody, which we don't have.

But in our case, the adverse event of dizziness is a manageable one, because it just depended on the titration schedule, and that can be flexible, changed, and that's what we now will, of course, do in the future. So that's the answer to your question. And also, needless to say, that we are also, acknowledging that, and we've heard that from physicians, that the dizziness sign, again, not all patients had that, we also have to put this in perspective, that it's a sign that, shows penetration in the brain and shows that something's happening in the brain. Also, one last point I'd like to make, that this dizziness lasted really relatively short for those patients who had it. It was sometimes between 7-11 days in the average.

So it's a very mild form of dizziness. So it's a very, you know, easy-to-address situation. But it shows up in this trial because, again, we forced patients to go to this high doses very quickly, and we learned the lesson that we can avoid that.

Soumit Roy (Analyst)

That is really helpful, color. So the last question is, when should we expect the open-label 96-week data? Is it CTAD or more towards the end of the year? And should we expect after that data, you would approach the FDA with the entire packet submitted to European Authority, plus this open-label? Or if you can provide any details there.

Christopher Missling (CEO)

Yep. So let us first put together data together, but once we have it, we will make the decision. But all your suggestions could be valid recommendations.

Soumit Roy (Analyst)

Thank you, and congratulations again on the progress.

Christopher Missling (CEO)

Thank you. I appreciate it.

Clint Tomlinson (Head of Investor Relations)

That's all the questions for now, Dr. Missling.

Christopher Missling (CEO)

Thank you. So 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.

Clint Tomlinson (Head of Investor Relations)

Thank you, ladies and gentlemen. This concludes today's conference call. We appreciate your participation, and you can now disconnect.