Anavex Life Sciences Corp. (AVXL) Earnings Call Transcript & Summary

Welcome to the ANAVEX 2-73-PDD-001 Study Call. My name is John. I'll be your operator for today's call. [Operator Instructions] And I will now turn the call over to Dr. Christopher Missling.

Welcome, everyone. I am Christopher Missling, President and CEO of Anavex. And I'm here with Professor Dr. Dag Aarsland. Dr. Dag Aarsland is Professor and the Head of Department of Old Age Psychiatry at the Institute of Psychiatry, Psychology & Neuroscience, King's College London, U.K. Professor Aarsland is also consultant psychiatrist at the Mental Health for Older Adults and dementia, South London; and mostly NHS Foundation Trust, where he leads the Parkinson Spectrum Memory Clinic. Before beginning, please note that during this 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. These include, without limitation, the company's Form 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those discussed in the forward-looking statements. These factors may include, without limitation, risks inherent in the development or commoditization 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. So with that, I would like now to introduce Professor Dag Aarsland, who was not part of the PDD study. He is a member of the Anavex Scientific Advisory Board. Professor Aarsland earned medical degrees from University of Bochum, Germany; and Oslo, Norway; with training as a specialist in psychiatry and geriatric psychiatry. He founded and still leads the nationally acclaimed Center for Age-Related Diseases at Stavanger University Hospital. He completed his PhD and became appointed associate professor and later full professor of Old Age Psychiatry at the University in Bergen, Norway. Later, he became professor at the University of Oslo before becoming appointed as Professor of Clinical Dementia Research at the Alzheimer's Disease Research Center (sic) [ Center for Alzheimer Research ] at the prestigious Karolinska Institutet in Stockholm, Sweden. After working in Sweden for 5 years, he moved to his current position at King's College London. Professor Aarsland developed and led the European consortium for dementia with Lewy bodies, with more than 25 centers across 13 European countries. With a common database of more than 1,200 Lewy body dementia patients, by far, the largest Lewy body dementia patient sample in the world, he developed a Parkinson Spectrum Memory Clinic focusing Parkinson disease and dementia with Lewy body. Professor Aarsland played a central role in the study and subsequent paper that led to the licensing of rivastigmine for Parkinson dementia. Professor Aarsland has published more than 400 paper and numerous books. So let me describe first the PDD study, and then Professor Aarsland can share more about the PDD indication itself and its heterogeneity and why this data today is so encouraging. The ANAVEX 2-73-PDD-001 study was a study conducted in Spain and Australia as a double-blind multicenter placebo-controlled Phase II clinical study under the principal investigator, Dr. Jaime Kulisevsky Bojarski. 132 patients with PDD were randomized equally to target doses of all once-daily 30-milligram, 50-milligram ANAVEX 2-73 or placebo, respectively. In addition to safety and cognitive efficacy, sleep function was assessed during the study at week 8 and week 14. After completing the trial, participants were able to enroll in a voluntary 48-week open-label extension study, ANAVEX 2-73-PDD-EP-001, which continues to assess safety, long-term efficacy and changes in gut microbiota. So we are happy to share the ANAVEX 2-73-PDD-001 study results in a proper scientific setting and the data will be submitted for presentation at a medical conference and for publication in a peer-reviewed medical journal. Anavex is planning a pivotal trial of ANAVEX 2-73 in Parkinson's disease dementia after submitting the results of the study to the FDA to obtain regulatory guidance. The study found that ANAVEX 2-73 was safe and well tolerated in oral doses up to 50-milligram once daily. The results show clinically meaningful dose-dependent, that means the higher the dose, the stronger effect and statistically significant improvements in the Cognitive Drug Research, CDR, computerized assessment system analysis. There was also a strong significant signal in improvement in the memory domain, mainly impaired and relevant for Parkinson and Alzheimer. Cognitive Drug Research computerized assessment system is an automated test battery validated for use in PDD, Alzheimer's disease and other dementias. The battery is modular, covering attention, concentration, verbal and visual spatial recall and recognition, verbal and visual-spatial working memory, psychomotor speed and information processing speed. Lastly, I would like to refresh our memory how ANAVEX 2-73 works. The mechanism of action of ANAVEX 2-73, blarcamesine, is to activate the sigma-1 receptor, which has been shown to play an important role to restore neural cell homeostasis and promoting neuroplasticity. So what was identified in the previously performed ANAVEX 2-73 Phase IIa study in Alzheimer disease, that the current study confirmed the precision medicine approach of targeting sigma-1 as a genetic biomarker of response to ANAVEX 2-73 in this double-blind control study. That means for the cohort carrying the common sigma-1 wild-type gene, representing 80% to 84% of the worldwide population, while the cohort carrying the sigma-1 RSY [ 1-800-866 ] gene variant representing the corresponding balance of 16% to 20%. The observation was that the drug effect was substantially better in the cohort carrying the common sigma-1 wild-type gene, representing 80% to 84% of the worldwide population than in the whole study group compared to placebo. So we had observed this in the previous ANAVEX 2-73 Phase IIa Alzheimer's study and now confirmed this in this placebo-controlled Phase II PDD study. And that is very exciting since this separates ANAVEX 2-73 from other CNS drugs since it increases the signal of the effect of the drug while sparing patients which don't respond as strongly. It also makes intuitively sense since ANAVEX 2-73 is targeting the sigma-1 receptor, hence, this receptor needs to be in good shape, like a well-inflated tire compared to a flat tire, which still allows to run the car, however, is not as fast as the fully inflated tire, as an example. And this confirmed observation represents the core framework of precision medicine and also confirms now for the third time after we saw dose-dependent target engagement of ANAVEX 2-73 with the sigma-1 receptor in a PET study and the second was an RNA expression increase of the sigma-1 gene in the Alzheimer's study, in the Phase IIa Alzheimer study. And now this third information -- this third came now with the placebo-controlled validation of the sigma-1 receptor responding better with the wild-type common sigma-1 gene to the -- of the population. So now let's speak about Parkinson's disease dementia and dementia and the unmet need as well as in general. As we get older, and according to the World Alzheimer's report, there are 125 million people worldwide with dementia. I'd like to turn over the discussion to Professor Aarsland. Dr. Aarsland, would you mind giving us a picture, bigger picture, on the current indication of dementia and Parkinson's dementia, in general, and why this data is so important today?

Thank you, Dr. Missling, and thank you for allowing me to talk about dementia in Parkinson's disease. So as most of you will know, Parkinson's disease is the second most common neurodegenerative disease in elderly people after Alzheimer's disease and also labeled as a motor -- primarily, a motor disorder. Research from our group and many others have shown that cognitive impairment and even dementia is very common and occurs with time in the vast majority of all patients with Parkinson's disease. And also there's robust and various research showing that these cognitive impairments and the dementia is a key determinant of patients, quality of life of caregivers' burden and of functional -- the functioning of the patients and also have the economic costs. So cognitive impairment and dementia is one of the absolute key aspects of Parkinson's disease. There are some possibilities to treat dementia in Parkinson's disease, mainly rivastigmine and also donepezil, cholinesterase inhibitors shown many years ago and started this. But -- and these are approved indications, but during the last 10 to 15 years, no new therapy has emerged. So in that perspective, it's very, very promising to see a new interesting data demonstrating cognitive improvement in Parkinsons disease dementia with this new drug, which also has a very interesting new mechanism of action. And finally, I also wanted to add that although some elements of the mechanisms of Parkinson's disease dementia are known, a lot of the background is unknown. But we clearly know that there's a huge variability in the clinical course and the underlying pathology and the opportunity here to have a precision medicine approach to identifying patients who are likely or not likely to respond is also very intriguing from a clinical point of view.

Appreciate it, Dr. Aarsland -- Professor Aarsland. What is the way of focusing in Parkinson's dementia? Is the -- it is known that Parkinson's disease develops now 80% dementia. And as the treatment for Parkinson are improving with L-Dopa, that means also all these patients live longer, and as a result, there will be no more unmet need for dementia in Parkinson. Is that accurate?

That's very accurate. So the survival time in Parkinson's disease is actually fairly close to survival in people without Parkinson's disease. So -- and as you mentioned, at least 80% of people with Parkinson's disease will develop dementia. So this is clearly a huge unmet need, and Parkinson's disease dementia is one of the key and most important diseases or courses of dementia in the population, overall.

That's appreciated. So I think Dr. Aarsland, thank you so much. I think at this point, we will move on to the next part of the call, which will be a question-and-answer session for equity analysts. [Operator Instructions] And I'd like to pass on to the operator for that.

And our first question is from Robert LeBoyer from Ladenburg Thalmann.

Congratulations. This is Robert LeBoyer, and I had a question about the measures of efficacy. And were there any specific features or measures that went into the primary endpoint that you can point to as significant or especially meaningful before it's presented scientifically?

Yes. So the key underlying primary and secondary endpoints of the CDR cognitive domain of attention were met. The key composite scores of CDR were met. And additionally, there was a strong and significant improvement in the memory domain which is mainly impaired and relevant for Parkinson's disease.

Okay. Great. And if I could ask a follow-up. You had mentioned that there were -- that you used 2 doses and the safety was shown in both doses up to 50 milligrams. Do you think that you've determined a dose to bring into the pivotal trial?

Yes. So this is just the first data run and we wanted to immediately inform the shareholders about the data. So the ongoing analysis is now to establish the optimal dose out of the PK analysis. But I can confirm that both doses, the 30-milligram and the 50-milligram, responded. So both were efficacious. It's now about fine-tuning if the optimal dose is, like, 30 or 31 or 35 or 40, and that is to be determined, but the 30-milligram dose was already efficacious and significant.

[Operator Instructions]

So if there are no more questions, I'd like to...

I'm sorry. I'm sorry, doctor, we do have Robert LeBoyer once again with the question.

One other question. Were there any other effects in the secondary endpoints that were meaningful or significant that you'd point to? Or anything on movement disorders?

So we have focused on the dementia analysis, and we will look exactly into that. Also, we do know that the movement impairment is better captured in actigraphy. So that this is the secondary endpoint, and the actigraphy data is a 24-hour measure of the movement of the participant, and that is because it's such a volume of data needs to be analyzed right now. So we don't have any data yet about that. Also the extension study, which is now continuing over 48 weeks, will provide more detailed impairment or the movement over time since this is also in -- shows up more stronger and a longer duration of drug exposure. But the secondary measure of movement was the actigraphy, which is not available yet. But we will include it in our presentation, and we will present it and publish it, as we mentioned today.

And that's all the time we have for questions. I'll now turn it back over to Dr. Missling for final remarks.

Thank you. So in summary, I want to point out that our strategy to advance ANAVEX 2-73 with focus on physician medicine has been clearly validated in the study of patients with significant cognitive impairment. And we are looking forward to the next clinical data readout of ANAVEX 2-73 in Rett syndrome and Alzheimer disease. These are indications where cognitive impairment is also prevalent. I also like to thank all participants in today's call related to the ANAVEX 2-73-PDD-001 Parkinson's disease dementia Phase II study. And I hope that based on the described development stage, you are as much as excited as we are about the potential for ANAVEX 2-73 for the upcoming studies in Rett syndrome and Alzheimer's disease. Should you need any additional information or have any questions, please visit our website at www.anavex.com or call or e-mail us. This concludes our remarks for today. Thank you very much.