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

Good morning, and welcome to the Anavex Life Sciences Fiscal 2024 Third Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. [Operator Instructions] 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. 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 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 IIb/III plant trial, blarcamesine, ANAVEX2-73, which we 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 our associated neuroimaging adverse events. Full data from the blarcamesine study in Alzheimer's disease Phase IIb/Phase III placebo-controlled clinical trial will be published in an upcoming peer-review journal. We initiated process for submitting a marketing authorization application, MAA, to the European Medicine 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 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 seek, which would reveal which genes are actively transcribed, or in other words, expressed in Alzheimer patients in comparison between placebo and blarcamesine of the placebo-controlled Phase IIb/III blarcamesine trial in early Alzheimer disease is underway. This data might have relevant value since it may provide insight into Alzheimer's disease pathology and our 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. We -- the recent AAIC 24 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's 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 time lines in the ongoing Phase II clinical trial of ANAVEX-3-71 in schizophrenia patients. We have completed dosing of the first cohort and are mirroring the completion of enrollment on the second cohort of schizophrenia patients in Part A of the trial. In Parkinson's disease, initiation of ANAVEX-2-73 Phase IIb/III, a over 6-month trial, including biomarkers, which we believe may be key for understanding drug effect on Parkinson's disease pathology and account for the recently changing context in the field of Alzheimer's disease -- 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 - 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 II/III clinical trial was presented at the 19th NFXF International Fragile X conference, meeting with the NFXF leadership team strengthened Anavex's relationship with 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's [ three ] Phase II/III preclinical 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 and evolving 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 a financial summary of the recently reported quarter.

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 30 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 noncash working capital accounts. At our current cash utilization rate, we believe we have a cash runway of approximately 4 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.

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.

Thank you, Christophe. 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. And the first question comes from Tom Bishop, BI Research. Tom, you should be. . .

Hey. You hear me now?

Yes. Great. Thanks, Tom.

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 the EMA, and has the date been set for either? Or is there some sort of hold up or additional data you're waiting for?

Thank you for the question. There's no holdup. 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 is -- 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.

Okay. With regards to the recent presentation at the AAIC, the Phase IIb/III 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 you -- 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 as to whether you do anything with the data that's given?

May I understand better. You talk about the number of patients in each visit, schedule visits...

In the different things like COG 13 and whatever that you presented to the AIC [indiscernible]

[indiscernible]

So the number of patients. . .

[indiscernible] time point?

Yes.

So the -- so this is -- 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 at other papers from [ Aduam ], 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 [indiscernible] procedure.

But you used the data exactly as given to you by the biostatistical firm? And who was that?

Yes. 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.

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

So the company has been extremely cautious with financing. We've been very conservative while other companies spend a ton of money. We've been very diligent on being very cautious with our fiscal 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 will -- could arise, but it was just to put in place something so we have it in place for the future.

Okay. And regarding Rett, is there a date to initiate another Rett trial or -- I'm not sure what's going on there.

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

Okay. And finally, with regards to Fragile X was there a Phase I? You mentioned going to a Phase IIb/III, I think, and...

Phase I was done with blarcamesine with ANAVEX-2-73 already. So we can start into a Phase II because of the Phase I was already done prior to this because of the drugs already tested in human -- healthy volunteers.

Okay. And actually, I have one more. With regard to schizophrenia, can you remind us a little more or explain the first cohort, the second cohort, Part A. . .

Yes.

. . .is there a Part B? I mean, could you just run through that again?

Sure. So Part A is single ascending doses. So we test the tolerability of the patients for the first doses, a lower dose and a higher dose subsequently. And the second higher doses now almost completed enrollment. And the Part B will be a longitudinal study around 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.

So the second dose is the higher dose.

So, the second dose from Part A is the higher dose and Part B will be the dose which we choose once it starts, and it will be a longer trial of 28 days or 4 weeks basically.

Next question comes from Soumit Roy at Jones Research.

Good morning, everyone, and also congrats on executing on multiple fronts. On the AIC data, Alzheimer's disease, could you give us a little color, make us understand on the dose dependency or a clear lack of dose dependency between 30 milligrams, 50 milligrams, there was ADAS COG was working a little better for the 50-milligram versus CDRs before the 30 milligram. And the discontinuation rate, are you -- so what percent of the 50 milligram did you see had to scale back to 30 milligram because of adverse events in the open-label extension?

So let me talk -- address the first question first. So the 2 arms are those 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-milligram dose group or 50-milligram group. So since we allow titration to the best tolerated dose for those 2 arms as well as Placebo, by the way. We basically realize that the -- at the end of the day, the target dose for most patients was relatively close to each other in those 2 arms. So while in the 50-milligram group, they were some with 50 milligrams, there were also some with 30. So it was a bit higher than the 30-milligram group, but not by much. So they are pretty much close. And that's why we also prespecified the 2 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 IIa. So there's no doubt about 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 noticed where we force patients to uptake trade to the [indiscernible] 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 then we didn't feel comfortable about it, so because they are not impaired patients, they're early Alzheimer. 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 and also allowing patients to take the drug at night time instead of in the morning, which we basically force 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 the drug for a longer period of time. And we noticed it also in the compassionate use program where this extremely high tolerance with allowing patients to titrate 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 force them to titrate so quickly up to the target dose. And we also have to point out that it's actually a -- clearly a 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 percentage 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's just dependent on the titration schedule, and that can be fixable, changed, and that's why 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 knowledge that -- and we've heard that from physicians that the disease, 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 is happening in the brain. And also one last point I'd like to make that dizziness lasted really relatively short for those patients who had it, was sometimes between 7 to 11 days in the average. So it's a very -- and a mild form of dizziness. So it's a very easy to address situation. But it shows up in this trial because, again, we forced patients to go to these high doses very quickly, and we learned a lesson that we can avoid that.

That is really helpful to color. So 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 package submitted to European authority plus this open label? Or if you can provide any details there?

Yes. So let us first put together, our data together. But once we have it, we will make the decision. But all your suggestion could be a valid recommendations.

Thank you, and congratulations again on the progress.

Thank you. Appreciate it.

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

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.

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