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

Good morning, and welcome to the Anavex Life Sciences Fiscal 2023 Fourth Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. [Operator Instructions] Please note that this conference is being recorded, and the call will be available for replay on Anavex' 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. And with that, I'd like to turn the call over to Dr. Missling.

Thank you, Clint, and good morning, everyone. Thank you for being with us today to review our most recently reported financial results and to give our quarterly business update. We are very excited to be entering a new phase of the company's history. For the first time, we initiated the process of submitting a Marketing Authorization Application to the European Medicines Agency, EMA, for blarcamesine related to the treatment of Alzheimer's disease. Relatedly, we are starting to explore possible commercial activities and examining innovative strategies to effectively engage patients, providers and payers. There's a high demand for Alzheimer's disease patients and families for easy access and scalable treatment options. We are striving to work towards presenting a drug that will potentially improve patients' lives with our precision medicine, oral blarcamesine, which is intended to reduce the need for complex procedures for the treatment of people with Alzheimer's disease. According to the European Brain Council, there are an estimated 7 million people in Europe with Alzheimer's disease, a number expected to double by 2030. Full data from the blarcamesine Phase IIb/III randomized clinical trial in Alzheimer's disease will be published in an upcoming peer-reviewed journal. Also, the respective open-label extension 96-week trial ATTENTION-AD is ongoing. Regarding Rett syndrome, we are on track for top line data of potentially pivotal ANAVEX 2-73-RS-003 Phase II/III EXCELLENCE pediatric clinical trial. Regarding the Parkinson's disease program, we are in preparation to initiate the ANAVEX 2-73 imaging-focused trial and the ANAVEX 2-73 Phase IIb/III 6-months trial. Related to schizophrenia, we are in preparation to initiate the Phase II clinical trial with ANAVEX 3-71, our second clinical-stage small molecule. With respect to Fragile X, we are in preparation to initiate a potentially pivotal ANAVEX 2-73 Phase II/III clinical trial. And related to a new rare disease, we are in preparation to initiate a potentially pivotal ANAVEX 2-73 Phase II/III clinical trial. We are also expecting further peer-reviewed clinical publications involving ANAVEX 2-73 and ANAVEX 3-71. In October, we announced a new peer-reviewed publication in the journal Neurobiology of Aging, titled Early treatment with an M1 and sigma-1 receptor agonist, prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology, featuring the orally available small molecule ANAVEX 3-71. This preclinical study describes the potential disease-modifying properties of ANAVEX 3-71 on Alzheimer's disease pathology as a possible drug candidate for once-daily oral preventative strategy for Alzheimer's disease. And lastly, this month, we announced the expansion and strengthen of our patent portfolio with the United States Patent and Trademark Office, USPTO, granting U.S. Patent number 11,813,242 entitled A2-73 as a therapeutic for insomnia, anxiety and agitation. This patent expands Anavex’ existing patent coverage of blarcamesine, including U.S. patent number 11,337,953 to cover Anavex' leading drug candidate, blarcamesine, ANAVEX 1-41 and ANAVEX 91-44 (sic) [ 19-144 ] for treating insomnia, anxiety or agitation. This granted U.S. patent is another important milestone in protecting the commercial potential of blarcamesine and Anavex' other lead components with a practical value of delivering holistic care for patients with Alzheimer's disease, dementia or Parkinson's disease. And now I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a financial summary of the recently reported quarter.

Thank you, Christopher, and good morning, everyone. I am pleased to share with you today our fourth quarter financial results. Our cash position on September 30 was $151 million. During the quarter, we utilized cash and cash equivalents of $5.8 million to fund our operations. At our current cash utilization rate, we believe we continue to have sufficient cash runway to fund operations and clinical programs beyond the next 4 years. During our most recent quarter, general and administrative expenses were $2.6 million compared to $3.2 million last quarter. Our research and development expenses for the quarter were $10 million as compared to $10.3 million for the last quarter. And lastly, we reported a net loss of $10.1 million for the quarter or $0.12 per share. Overall, and in summary, we plan to continue to be fiscally responsible, and we believe we continue to have sufficient cash runway to fund operations and clinical programs beyond the next 4 years. Thank you. And now back to you, Christopher.

Thank you, Sandra. Again, this is an exciting time for the company, and we're very excited to be entering a new phase of the company's history with our biomarker-driven precision medicine programs. I would now like to turn the call back to Clint for Q&A.

Thank you, Christopher. We'll now begin the Q&A session. [Operator Instructions] And our first question is coming from Soumit Roy at Jones Research.

Congratulations on all the progress. First question on the MMA application. So if you can give us a little background on the discussions you've had with the European authority, and how much data they have seen that prompted the application for a full approval rather than a conditional approval?

Yes. Thank you, Soumit. We have met the European agency several times in meetings, and we have shared the data, which is not yet published, which is the published data of the planned published communication of the full data of the Alzheimer's Phase IIb/III study. And we were, from this meeting, recommended to proceed with this application, full approval application, and that's why we proceeded with last week accordingly.

I see. And what are the plans for the U.S. approval? Do you -- is this going to prompt a FDA conversation if you have any meeting scheduled? Or you think you would go ahead with the Phase -- full Phase III trial or 2 trials?

So we have the ongoing ATTENTION-AD study ongoing, and that's part of the package of the application with the Phase IIb/III study. We knew that the timing of the European application takes longer, so we proceeded with that first. That does not mean that we will proceed with other international applications as well. But the European decision to start the dialogue with the European agency was also based on the fact that we had a majority portion of the patients in that region, so it would be a respectful decision to approach the European agency first.

I see. And one last question on the Rett program. Could you give us a little bit of color when are you still expecting the data? Is it going to be before the year end '23? And is there any delay? Or is it an expected safety window that you have follow-up that you have to -- you are doing, which is why pushing the data back?

Yes. After the last 12-week readout, there was an additional safety follow-up, and that's basically why the timing is maybe a little bit different from expectations. But we are on track to release this data once we have it.

Congratulations again on all the progress.

Thank you, Soumit. The next question will come from Tom Bishop at Bishop Research. Go ahead, Tom. You're muted, I believe, Tom.

Can you hear me now?

Yes, there's a little echo, but we can hear you.

Okay, oh boy. Can you -- will we get insomnia data?

Go ahead. Insomnia? So part of the trial's outcome was sleep measures of the Phase IIb/III Alzheimer's study. And we will also have analysis of this data, and we will also make sure that this data will be made public. We had noticed in our Parkinson's disease dementia study an improvement for those patients who had insomnia to improve this indication. And we have seen similarly in the Alzheimer's study an improvement of that endpoint as well. And that also was the basis for the patent and the patent application and ultimately, the granting of the patents. So the answer is yes. This data eventually will be also made public, the beneficial effect of the drug on the sleep paradigm.

But in the final data?

It might be done in several different slices of papers because papers have a limited number of data points and number of words you can include. So the first paper will be the full data of the main items of the endpoints, and then additional endpoints might be separately published.

What about Australia?

What about Australia?

Yes, approval.

So the -- again, as I mentioned before, the most time-consuming, lengthy, because it's a very structured process in deadlines, is the European application. And that's why we went there first. And also because that patients were mostly or partially in Europe. As for that reason, we started the process there. But the main reason was really that the process for application takes the longest in Europe. So it's the first we started with, and the international other applications will subsequently proceed.

Okay. The Parkinson's data has been in the wings for a long time. What's the delay?

What Parkinson's data, please?

The Parkinson's, the next trial.

The initiation of the trial? Yes. So we had several very productive interactions with KOLs, and we were able to fine-tune the protocol to maximize this protocol, to make it really crystal clear and easy to adhere to, but also make it meaningful for future application. And that's why we ended up doing it so properly. And you will get the news eventually that when we have the first patients dosed. So we proceed with that indication.

The enrollment of the 96 trial, the status?

The majority of the patients from the 96 ATTENTION-AD trial were derived from the Alzheimer's Phase IIb/III study. And they all came from the Alzheimer's Phase IIb/III study. That's the correct way to put it. And we had extremely high rollover from the double-blind placebo trial into the open label ATTENTION-AD study. I think it was over 90%. And we have a large number of patients on this study. We even have the first patients who finished that study going over and requesting an extension of this extension by another year. So it became now a 144-week study for some patients. And thereafter, we also have patients which requested to be given the drug continuously. And we provided them the drug on compassionate use. So there's a high request for patients to stay on the study drug.

So I believe that's the end of the call as we have no further questions at this time. Back to you, Missling.

Thank you. So again, this is an exciting time for the company, and we are very excited to be entering a new phase of the company's history with our biomarker-driven precision medicine programs in addressing significant unmet medical needs and economic burden. We remain very focused on execution as we prepare for the year ahead of us. Thank you very much.

Thank you, ladies and gentlemen. This concludes today's conference call, and we appreciate you participating. You may now disconnect.