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

All right. We'll go ahead and get started. Good morning, everyone. My name is [ Lolita ], and it's my pleasure to introduce the speaker for the Anavex presentation today, President and CEO of Anavex, Dr. Christopher Missling. With that, Christopher, I'll turn it over to you.

Thank you very much for the kind introduction, and that's very kind of you to get us invited to this conference. We're very excited about presenting today Anavex Life Sciences. We are a public company, so I would like you to read the forward-looking statement. Thank you. So Anavex is dedicated to creating scalable drug therapies that are both easy to administer and accessible. We are contributing to the sustainability of global healthcare as well. Our commitment is that cutting-edge CNS treatments are available to an adverse patient population, ultimately enhancing the effectiveness and reach of healthcare systems. We believe that this focus on accessibility and sustainability represents an alternative and attractive opportunity in supporting innovative solutions for global healthcare challenges. And with our scientific advancement, we have gotten in very interesting indications, which have high unmet need, which includes Alzheimer's Disease, Parkinson's Disease Dementia, Parkinson's Disease and Rett Syndrome. Our precision medicine approach has developed drugs, which activates the body's own defense mechanism and makes it a small molecule activating very more upstream than many therapeutic interventions developed so far. And we're aiming to bring this drug treatments to market across the globe. Let me explain a bit more about the mechanism. When we learned recently about GC -- GLP-1 agonist, we basically become intrigued by the fact that another one of agonist in the metabolism and ultimately, in the body's own defense mechanism becomes a therapeutic intervention of choice with great success, which we know from GLP-1 agonist these days. And sigma-1 is also a target which we activate. So our drugs based on the sigma-1 activation. A protein, which is required to restore homeostasis or reduce cellular stress in the body, which can be caused by either chronic cellular stress caused by genetic dysfunction like Rett Syndrome, Fragile X and others or by the chronic accumulation of cellular stress by aging, which is the classical example of Alzheimer and Parkinson. And in both or all these cases, therapeutic indication so far, we've observed that every time we have this down regulation of the SIGMAR1 because of not enough countering agonist endogenous are available in the body, we can provide them from the outside to activate the SIGMAR1 protein to increase the level of countering and engaging and restoring function and reducing cellular stress and ultimately benefiting the patients. We also have observed that the SIGMAR1 binding is so target-specific and has a binding affinity that is so specific that even when patients have a slight mutation or carry a SIGMAR1 variant that they still are benefiting from the SIGMAR1 activation. So overall, we have observed in all our trials so far, a benefit from all patients regardless of their genotype, which, of course, is very important because that is comprehensively addressing the entire population which can be treated with ANAVEX 2-73 or blarcamesine and with this approach. I want to also provide you a very important feature, which is important in CNS which is often lacking, which is a biomarker correlated outcome. So we have observed in all our clinical trials, which we have completed so far and analyzed with the expression level of the SIGMAR1, we have observed that every time there was a benefit -- clinical benefit observed that the responding biomarker, which we measure it by expression levels of mRNA in the blood was every time increased. So the little of SIGMAR1 expression correlates every time a benefit takes place. These are very strong pieces of evidence of mechanism of action and we have observed that in Alzheimer's disease in a study which was published as well as in Parkinson disease, in Parkinson's dementia and ultimately also in Rett syndrome. So every time a benefit was measured in the respective end points, the SIGMAR1 activation in the active arm correlated with a benefit. And this was also confirmed with the SIGMAR1 variant analysis, which is independent of the expression level of the SIGMAR1. That ultimately leads us to be able to define the science of Anavex as precision medicine because increases likelihood of clinical success because we are able to observe the clinical benefit with a biomarker of efficacy. Now let me share with you the activities which are ahead of us which are very exciting activities. One of the major activities are the full data of the ANAVEX 2-73-04 Alzheimer's study, Phase II/III, and we've been very cautious in the communication so far. We want to conserve this data to a journal, a paper, which requires this procedure. We also want to mention that we are in the process of starting a Parkinson's disease Phase II/III study after we had successfully completed a Parkinson's dementia study and we measured MDS-UPDRS and showed improvement in this primary endpoint score. But we also want to proceed with our rare disease rare disease franchise and we are planning starting a Fragile X study, a Phase II/III, which is a very intriguing indication because it has overlapping features of Rett Syndrome, which will come in a minute or 2. And the size of the Fragile X market is 7x the size of a Rett Syndrome market. So a very attractive proposition as no drug yet approved for Fragile X. And then also, I'd like to point out that we have a pipeline of other drugs, including ANAVEX 3-71 and among them, finishing the solid Phase I study, which was very positive, we are now starting a Schizophrenia study with ANAVEX 3-71. And what is very intriguing about this molecule ANAVEX 3-71, is that in addition to SIGMAR1 activity, we also have, with the ANAVEX 3-71 molecule are very strong in selective M1 activity. And as you follow a little like the CNS landscape, you might have noticed that a company with an M1 agonist was recently bought for $14 billion in a buyout by Bristol-Myers. So there was the company, Karuna with their M1 agonist for schizophrenia. And our scientific founders always described to us that the 3-71 molecule, the ANAVEX 3-71 might have very strong features for schizophrenia because of its potential synergy between SIGMAR1 and M1 agonist. So we are looking forward to this trial and are excited to initiate that. We also have in the background, which we have not disclosed yet, many more preclinical data with rare diseases, which have shown positive outcome with our drug or drugs, ANAVEX 2-73. And we are in the process of deciding which one of these indications should be selected as the next rare disease to also initiate a study in. But again, this also contributes to the information that we really are sitting on a very strong pipeline and a platform pipeline not only limited to one drug. Last not -- but not least, I also want to point out, in addition to the therapeutic intervention of this upstream approach with this small molecule compensating for cellular stress, which in the body is evolving in pathologies, we also have observed the potential to prevent pathologies like Alzheimer's disease in 2 different and independent animal models for ANAVEX 2-73 as well as ANAVEX 3-71. So in both the independent animal models, we gave the drug to the animals and then we made them sick with Abeta injection or other features of Alzheimer pathology. And every time we have observed that the active arm did not become impaired cognitively while the placebo or the control arm of these animals did. So very nice to see also the path forward that this simple oral once-daily molecule, which can be taken at breakfast, if you like, one day could be something to think about down the road in the future as an administration for prevention of pathologies across the board. I'd like to now go more into details of the indications, which we have so far explored with our SIGMAR1 and SIGMAR receptors discovery platform, which was established in the company since inception. So all the molecules are owned by the company. We have identified these molecules in the lab. We then went to identify a biomarker of efficacy. I mentioned SIGMAR1 expression of mRNA in SIGMAR1 variant levels with genomic precision and went ahead and found indications, which could benefit patients. Among them are Alzheimer's disease, Parkinson's Dementia and Parkinson's disease itself as well as Rett Syndrome. So we're now moving forward in schizophrenia, frontotemporal dementia. We have also the plan to move forward with Fragile X on the right side and Infantile Spasm, Angelman Syndrome, and other indications I mentioned. And in all of these indications, you see here, we have very strong fundamental preclinical data to support potentially entering with our molecules in the clinic. I also want to mention molecule on the right side, ANAVEX 1066, which have been shown very encouraging data in a model or different models of pain, including visceral pain. So let me now go over in more details the different indications where we have clinical data. We were able to get complete 2 clinical data in Alzheimer's disease. And the first one was a relatively long study in ANAVEX 2-73 over -- lasted now over 5 years and patients on the study actually requested to still stay on study drug after 5 years. So we opened up compassionate use program for this patient, which is still ongoing. We had an interim analysis done as 148 weeks of this study, and it showed very nice resilience of -- for patients on the right dose to not decline in cognition and function. This data was published and the source is in this presentation. And then we went on and did the larger study, the Phase II/III, which I will describe a little bit like in the next slides. It's important to be aware, this is the largest CNS indication of unmet need with 35 million patients worldwide affected by that and 6.5 million in the U.S. alone and given that clinical advancement and medical improvement is so high to address every aspect of body's impairments like replacing a kidney, replacing knee and replacing hips. But the only area where we don't have yet the ability to enter and really do something fundamental difference really the brain because of its complexity. But we think we have something intriguing here because of our approach is more upstream and comprehensive and more comprehensive than downstream targeted therapies, which are also still in development. So the Parkinson's disease franchise started with us with the background that Michael Fox Foundation fully funded us to develop the confirmation of this molecule to be beneficial for Parkinson's disease. And this led to a discovery of that the drug was showing our ability to benefit in a 6-OHDA model, which is a disease-modifying model of Parkinson's disease to reverse actually the pathology of Parkinsonism and reduce inflammation and restore function for the animals. We then use that as a basis too because we have knowledge about the Alzheimer features of the drug, so cognition benefit to go and test the hypothesis in Parkinson's dementia. So this way, we could see if either or these 2 features, which were confirmed would also benefit in this really difficult indication, which has failed almost in all cases, in competitive landscapes. Parkinson's dementia has failed in almost all cases in other treatment regimens. And we successfully accomplished this Phase II study in Parkinson's dementia. And we're now planning to do a larger study to confirm that in a pivotal study. But at the same time, because of the benefit we saw in this dementia study with Parkinson, we noticed that a significant improvement of the motor impairment and quality of life measured by MDS Part II and Part III was significantly improved. And there was a huge demand from all foundations in the world, including Michael Fox of Cure Parkinson U.K. as well as the Shake It Up Foundation in Australia, to proceed with this molecule into a larger Parkinson's study. So we're planning now a larger Parkinson's study as well. So let me move to the rare disease franchise, Rett Syndrome. We were able -- and again, the same principle started here, like with Parkinson's disease, we gave the molecule to the Rett foundation. And they said, we will send the molecule, we had no lab anymore, to a lab, which -- of their choice with the choice of -- a model of their choice. And lo and behold, they called us up and said, what you got, and we said, "Well, it's our molecule." They said that we have only one shot and we gave it to these animals, and they improved better than any other model. That's really nice to hear. What shall we do? And they said, "Well, we should proceed in our clinical trial." And they supported us also in the first clinical trial, which went ahead and finished successfully in the U.S. And then we went ahead in adults and then we went ahead and did a study, same size in adults internationally, called the AVATAR study. And after that, we actually -- not after that in parallel because we're so excited, we went ahead and did this study in pediatric patients, the EXCELLENCE study. And this study was not fully powered. Was a Phase II/III. And it is not that we were not happy about it, but we had observed a little bit too high of a placebo effect, which is not uncommon, unfortunately, in young patients. And the fact that we also randomized 2:1 did not help that fact. But we saw a very strong signal to move ahead with this program. And as a matter of fact, after the study finished after 12 week of treatment, the majority of patients requested to go into the open-label extension of 48 weeks. And interesting enough, after 48 weeks, the majority of patients, 93% requested to stay on study's drug. And so opened up a Compassionate Use Program for these patients which they are now on this program for almost 4 years in totality, including the OLE program. And the prior AVATAR study, which finished earlier than the EXCELLENCE study, had even a higher rate of conversion into or request into the study of compassionate use. So very strong feature of confirmatory interest and benefit. And you have to understand, these patients are very impaired and they really are very sensitive. So if they would not have good safety observation and efficacy, they would drop it without any hesitation. We also -- we see the voices from these patients being very encouraging by saying in one case, "we did get a surprise once with her mobility." They're highly immobile, these patients are sitting in the wheelchair all the time. "We heard a noise from our family room. And next, we looked and Madeline had climbed 12 steps upstairs to her bedroom by herself." And we were told she never ever did that before. And another voice of a parent, "within a week of starting the ANAVEX open-label extension she only had 1 seizure and then she went 3 months without a seizure." You might be aware or not, but patients with Rett Syndrome had a high features or pathology of seizure up to 70% of patients have seizures. Very intriguing evidence. And when you click on these links, you will see more parents' voices to that effect. Now let me go to the next slide, which is showing you the overall pipeline and how we're going to move forward to address the unmet need. So really, the image gives you a support and feature that we really are sitting on a strong pipeline and also a platform of pipeline with multiple drugs, which all have in common more or less an affinity different features with other targets of SIGMAR1-related activations. And again, our SIGMAR1 activation is extremely intriguing novel approach of activating the body owned defense mechanism to restore homeostasis and push back on cellular stress, which can be either caused by genetic dysfunctions, Fragile X or Rett Syndrome and others or by lifestyle and aging like Alzheimer and Parkinson and others eventually as well. So now let me move to a study, which is the most advanced study in Alzheimer disease and probably the most important right now for the company. We did a 508 patient study in Alzheimer disease, early Alzheimer, with the oral once-daily treatment, and we randomized to active arm and placebo and what is extremely important is to be aware that we have included in the study a structural and functional MRI as well as all the biomarkers of relevance, Abeta, Tau and others and also what is very important in all our studies so far, we always included full RNA and DNA expression levels. So we will always be able to later on analyze the extreme interesting features of how the body reacts to the drug compared to placebo. And I want to mention quickly that we've finished these mRNA analysis expression levels for the Rett study so far and for the Parkinson dementia so far. And what we have observed is that every time we look at the pathology side of the patients, the placebo arm, we find the confirmation which is published that genes are overall down-regulated in these pathologies, in Rett syndrome as well as in Parkinson and also in Alzheimer, but when you look at the active arm patients, their genes are suddenly completely opposite to the placebo arm upregulated. So it's very interesting to see in very broad features and clusters of genes, which are countering apparently the pathology, which is ongoing in their body. So extremely intriguing heat map pictures of different colors between the active arm being up-regulating genes again towards healthy levels in the placebo arm showing mainly down-regulated genes. So we had a measured function and cognition in our key co-primary endpoints and the CDR-sum of the boxes as a secondary endpoint. And the data so far analysis, I want to explain that to you because it's not trivial. For regulatory purposes, you need both approval -- for approval, you need cognitive endpoints met as well as functional endpoints met. The cognitive is ADAS-Cog, the functional is ADAS -- ADCS-ADL or CDR-sum of the boxes. The pre-classified clinical endpoints were all analyzed in our study using the MMRM. This method is the convention used for regulatory filings in early Alzheimer disease. The trial is successful if the co-primary endpoints are met significantly for each endpoint at a p-value lower than 0.05. However, there are also significant or if the significance is reached for 1 primary -- co-primary endpoint at a level lower than 0.025. In that case also the trial is successful. However, since we need for regulatory purposes, also met -- meet the functional requirement of the drug effect, the CDR-sum of the boxes now comes next in line and that needs to be analyzed also at the p-value less than 0.025. And when you can see here that in both cases, the ADAS-Cog and the CDR-sum of the boxes, the key endpoints are less than 0.025. So we meet the requirements of that. In addition to that, we also have measured specific biomarkers of the pathology and they were significant of a better reduction measuring the Abeta 42/40 ratio which is on the right side of this slide, showing in studies before correlates very clearly with PET levels of the pathology of a better reduction in the brain. So it can be used exactly for the same logic as a confirmation of the Abeta reduction of the drug. However, what we are very intrigued about on top of it and we believe we have not seen any drug showing that in Alzheimer disease is what is the most obvious pathological signs, which also Alzheimer has observed in his patients, which is the shrinking of the brain and you see that on the right side of the slide, a healthy brain has a larger brain mass of white and gray matter. On the right side is a shrinking feature. You see the holes basically building up, the black holes in that brain. And that is what we have observed with our drug. We have observed that we can stop or delay the onset of this brain shrinking in many regions of the brain, which is fundamentally basically stopping the new degeneration in itself. Because of the data, which we shared with regulatory authorities in Europe with the EMA, we have initiated based on their feedback, the regulatory submission to the EMA for blarcamesine -- for oral blarcamesine for Alzheimer disease. We also have started now, we started to explore potential commercial activities and examine innovative strategies to effectively engage patients, providers and payers and it's also important, which I mentioned before that we will expect the data -- full data, which again, is not fully disclosed to come out in a peer-reviewed journal. Also we are -- want to make points aware that this study has completed the placebo-controlled part. However, it's now -- we have moved ahead with the open-label study of 96 weeks in addition to the 48 weeks. So the -- in totality will be 3 years. And as a matter of fact, there will be already an extension of this 96 to 144 weeks because of the request of patients to stay on study drug. So what we have observed previously, again, shows up also in this study, a request from the patient to stay on study drug with this orally once-daily dose. What we also want to share with you briefly is a bit of simple side-by-sale analysis to donanemab, which has recently published their data of early Alzheimer. And the ADAS-Cog13 was exactly also provided in this paper and a simple side-by-side analysis shows that our oral simple 1 daily drug has a superiority over donanemab by the fact that we are reaching a delay of decline of minus 1.783, much earlier than the donanemab, which has a minus 1.3 only at a much later time point which is 76 weeks. And this comes not at the cost of severe adverse events, which the antibodies carry, which is amyloid-related imaging abnormalities of edema or effusion observed with these antibodies. So we don't have that and also with the much simpler oral once-daily administration. The same is also the side-by-side analysis a simple comparison to Leqembi is a similar feature. We are reaching a separation between active and placebo arm, much at an earlier stage of time and which means that patients benefit much earlier, in this case, 24 weeks earlier. So very clear and exciting data of a preference. We don't want to diminish the antibodies. They are very important that they started this industry, but it's also something to be aware of that there's never ever a overlap in the mechanism. So this could be also a very good, blarcamesine a good drug to co-administration with the antibodies, if that is of interest. So overall, the market of Alzheimer is starting to ramp up even higher. We are now expecting and it's projected that the growth of Alzheimer will go over 150 million -- 130 million patients by 2050 and you can see from this slide, the ramp-up is really scaling very highly. And again, because of developed countries are the majority victims of this debilitative disease and debilitating disease and because it's often combined also with lifestyle, of course. So that's why we are starting to explore potential commercial activities and engage in patients, providers and payors and the high demand for Alzheimer's disease patients and families for easy access is in scalable treatment is really not to be underestimated. And -- and we, of course, want to reduce the need for this complex treatment, which are the antibodies unfortunately right now are facing from what we hear from investigators and KOLs. Again, oral once-daily blarcamesine would be, of course, a convenient opportunity in comparison. If you look at the market size, it's really interesting to see that also that in the U.S. alone, 6.5 million, the antibody themselves can only potentially target a fraction of that amount because for the antibodies in their trial, they required almost a bottleneck or an enrichment of using patients only who had several -- certain level of threshold of Abeta in the brain because the only mechanism of the antibodies is to reduce Abeta. So you need to have Abeta in the brain. Otherwise, you can, of course, not administer the drug without a benefit -- with benefit. So in our case, our trial did not have that requirement. We measure Abeta in other biomarkers from baseline to end of trial, but we did not have that requirement because our mechanism is for the upstream. And we knew from preclinical data that Abeta is a part of our reduction of the pathology, including Tau and inflammation. So the physicians decided who will -- is eligible to the trial. And for that reason, we believe the ANAVEX 2-73, blarcamesine indication of drug has probably a chance to address the entire market of Alzheimer's disease because there's no limit in terms of diagnostic of the patient with Alzheimer's disease. I want to also mention that we have strong patent protection, and we own worldwide rights to our drugs. And we also want to point out the separation between the oral once-daily solution for the rare disease franchise and the once-daily liquid solution for the -- for the rare disease franchise and the oral solid administration for the Alzheimer pathology and Parkinson pathology. So you can very nicely separate those 2 franchises with different doses as well as different branding. Again, all the administered candidates have an immense potential through a clinical benefit relative to costly and logistically challenges biologically antibodies and addressing also safety. So now let me start to close out. We have now sufficient cash, and we have over $150 million in cash as of last quarter. We also are benefiting from nondilutive funding from the Michael Fox Foundation, from the Rett Foundation and from the Australian Government. And so we have calculated that we have at least 4 years of runway as of today and the last year -- fiscal year 2023 required only a cash utilization of $27.8 million, it might be a bit higher this year. But overall, we have sustainable cash runway due to disciplined operations and nondilutive cash sources. Last not but not least, all of this work -- hard work would not be possible without a dedicated team, which we have. I'd also like to specifically highlight our more recent joining our team, which is Kun Jin, who is VP of Head of Statistics. And he was 27 years at the new division at the FDA, who is providing us with good insight and guidance on many features. Also, we have a very strong scientific advisory board, which consists of people you might recognize and also one with the expertise and their guidance provided us where we are today, and I'm very thankful for that. I also want to close out with the fact that we are sitting on an intriguing platform, which has the potential of transformation with this precision medicine platform to capitalize on significant market opportunities. We identified a precision medicine platform and novel central nervous system mechanism are improving the chance of success with these with genomic features with several different very promising therapeutic in very challenging areas of the CNS, again, very complex diseases. When you think about the Alzheimer pathology alone, I just read this morning another paper came out that Abeta in the patients is not equal to Abeta, they are different features of Abeta. So if you remove Abeta in some patients, it is more harmful than in others. So it's really very complex this entire pathology. And again, because our approach is more upstream, we think we can avoid this downstream micro management and our approach is more macro upstream management. We have achieved multiple successful milestones so far, and we're progressing. Also, when we have sometimes a hiccup with our robust data and commercial potential is now even highlighted with the progression into regulatory submission for ANAVEX 2-73 blarcamesine in -- to the EMA in Alzheimer's disease. And we also position very strong IP for the future, and we own the commercial rights to our drugs. And last but not least, we have enough cash to move ahead. And that's, again, thanks to the non-dilutive funding, which I want to thank at this point, again today, Michael Fox Foundation, the International Rett Foundation and the Australian Government for supporting us so far, allowing us to have enough cash for the next foreseeable future, including at least 4 years. And last not but not least, I want to close out that Anavex's inherent advantage is this platform scalability. And this allows for equitable and accessible to diverse patient population and maintaining sustainability within global healthcare system, which is something on a macro level, a big, big challenge, as we know, in all healthcare systems globally, not only the U.S. but also Europe and as well as Asia as well. With that, I'd like to thank for your attendance and though it's a Thursday morning, I appreciate coming today. Great crowd. And thank you again. And if you have more questions, feel free to reach out to us on www.anavex.com and stay in touch with us, and we're looking forward to continue the dialogue. Thank you very much.

Thank you very much. And I think with that, this concludes our presentation for this morning. Thank you all.

Thank you.