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

Good morning, everyone. Thanks for joining us both in person as well as online. This is the Anavex presentation at JPMorgan Healthcare Conference. My name is [ Juan Gill ], and it's my pleasure to be introducing you to the CEO of Anavex Life Sciences, Christopher Missling.

Thank you very much. I appreciate the very kind introduction and invitation from JPMorgan. Let me introduce Anavex Life Sciences since we are a public company, I like you to read this. I learned from the successful oncology research, which I was involved in prior to Anavex, an important lesson. The power of the body to fight cancer by activating the body owned defense mechanism that led to the question, why wouldn't that be possible with CNS diseases, which consist of even more complex pathologies. Here at Anavex, we like to change things. We aim to move things and science forward. We are dedicated to therapeutic discovery and development of targeted central nervous system treatments. Instead of trying to fix already broken things happening downstream, within the neuron, we try to fix wrong things at their start at the upstream top or start of reaction cascades or processes. A concrete example of this approach is in Alzheimer's disease. The company's lead asset, blarcamesine is a once-daily oral small molecule that enhances autophagy through sigma-1 activation and restore cellular homeostasis. Impaired autophagy processes are upstream of both Abeta and tau and therefore, anticipates the neurodegenerative process in Alzheimer's disease. We believe that we are well positioned to expand its transformative precision medicine platform and capitalize on significant market opportunities. And this market opportunities is described in a global burden of dementia, which is growing over $130 million by 2050 with $20 trillion cumulative cost in Alzheimer's disease dementia care and 1 in 3 Medicare dollars will be spent on people living with Alzheimer another dementia in 2050. So targeting this market using a differentiated and transformative precision medicine platform might be alleviating these problems. Let me summarize and introduce Anavex Life Sciences for some highlights. We are a regulatory submission stage CNS precision medicine company. As a matter of fact, we just received this morning on the EMA website, the confirmation of our submission. We're also now meeting with regulatory bodies around the world to review or ask for review of our Phase II/III data, which was published yesterday in the journal of JPET. We also have from a financial point of view, an estimated cash position which allows us to have a runway of up to 4 years currently, and we have no debt on the balance sheet. In summary, oral blarcamesine demonstrated superior nominal clinical safety and efficacy compared to the standard of care, but also compared to the currently in the U.S. in a few other countries approved monoclonal antibodies, LEQEMBI and Kisunla, lecanemab and donanemab respectively. And we also demonstrated in our Phase II/III study, the ability to slow neurodegeneration. Overall, oral once-daily blarcamesine is a scalable treatment. And we also enjoy wide patent protection for our product candidates. To give you an update on our product candidates, which is not limited to Alzheimer's disease in the totality, we have the franchise of oral administration, solid administration for Alzheimer and Parkinson, Parkinson's dementia on one side, but also we have an oral formulation for blarcamesine for rare diseases. So it will be a completely different market name and approach as well as the dose is different for Rett syndrome, Fragile X and other rare diseases. And last but not least, we also have a other compound in the pipeline called ANAVEX 3-71, also an orally available drug which is right now in Phase II for schizophrenia and for which we also have data in frontotemporal dementia and Alzheimer's disease preclinically. So in summary, orally administered candidates offer just a significant advantage in the clinical logistics as well as potential benefit for safety. Let me now go more into the mechanism briefly because that's important to understand. So our approach is helping the body to help themselves upstream. And what we noticed that in the body, the ability to restore hemostasis is through a protein called sigma-1, and this protein is underexpressed in pathology like Alzheimer's and Parkinson's and it's activated in the body with endogenous small molecules. And these small molecules are depleted because of constant cellular stress and using of these small molecules. So we are able now to refill the gap or the lack of these endogenous small molecules with small molecules from the outside. And these all represent our drugs. And in the end, what we have seen a restoration of the level to normal levels of sigma-1 to allow the body to repair and to regenerate and reactivate pathways, which are impaired in pathology. Another way to explain this one pathway, specifically is the autophagy pathway, which is impaired in Alzheimer's disease and other disorders. And we know that it's also impaired on top of our upstream of Abeta and tau pathology. And to put this in perspective, the monoclonal antibodies, they're able to remove Abeta and tau from a downstream approach, while the autophagy activation is not engaged with these antibodies. So it's a quite intriguing idea to see this as complementary with a small molecule to add to this franchise the ability to activate the autophagy, which is impaired. And be more elegant in the approach because also it removes and repairs and regenerates and build resilience of the body, which is very complex, which you can imagine, compared to the alternative treatments. We also want to give you a quick update on the upcoming milestones. We have accomplished a lot in the last 12 months. I'm also pleased to report that we, on time submitted and as scheduled the full EMA regulatory submission package to the EMA, which I mentioned was provided online today on the website of the EMA. And also, we were able to publish in JPET, the Phase II/III study data, which we had anticipated this quarter. And also, last not but not least, we were able to report for the first time, the top line data of the extension open-label ATTENTION-AD study of 96/144 weeks topline data. And we also will share a little bit more today about it, but more is coming in an upcoming scientific meeting. What is left to -- ahead of us for us is completing a Phase II study in schizophrenia with our other drug, 3-71, which is moving very nicely. The enrollment is extremely encouraging. We have seen no safety findings of concern. And also, that allows us to actually increase the number of patients in the study still being blinded to get a bit more power for this Phase II study, something which is intriguing to see. Also we're planning to submit a starting a study in Parkinson's disease, we will update you later this month about our program there and other disorders, which we are planning to submit. Last but not least, also I want to circle back on the mechanism. And we've shown in preclinical animal models for both drugs, blarcamesine and ANAVEX 3-71, the ability not only to address therapeutically the pathology of Alzheimer's disease but also to show preventative abilities by giving the animals the drug before they get diseased either through genetic modifications or through an injection of Abeta pathology and these animals never developed a cognitive impairment. So something to think about that we are able not only to expand the indication of these CNS disorders, but also to move into earlier treatment regimens eventually. So let me now give you an overview of the entire portfolio in a snapshot, which you can see in summary that we have multiple clinical milestone and a promising pipeline with potential progress towards commercialization and the most advanced project is, of course, the Alzheimer's disease program followed by the others in this summary presentation. I want to go into more details a little bit about the Alzheimer's program. So we completed Phase I study and Phase II study in Phase II/III study for Alzheimer and blarcamesine. And we're planning to also do a Phase II study in -- for 3-71, which had shown very nice preclinical data for -- in triple transgenic animal models, which was published, reducing Abeta, tau as well as inflammation. Then I want to also share with you Parkinson's disease franchise and Parkinson's disease dementia franchise where we have blarcamesine showing a very nice proof-of-concept study in a Phase II, and we are advancing now in Parkinson's disease as well what I mentioned before. And this patient has still not reached a drug which is able to easily address the pathology other than L-dopa, which is currently used to address symptoms of this disease. In Parkinson's dementia, we will also move forward eventually as well. And last not but not least, rare disease franchise with the liquid formulation, we completed 3 studies in this rare disease, 2 adult studies, 1 pediatric studies. And we have very strong and nice interaction with the community, with the KOLs, with the patient advocacy, which are requesting us to do another trial because of the unmet need. And I also want to mention that all the patients who have finished the previous trials, including the open-label trials are all on compassionate use today, and we see very positive feedback and some patients are on this program for over 4 years. And we have some very nice real world evidence quotes that we get a surprise once with her mobility. We heard a noise from our family room. The next we looked, Madeline had climbed 12 steps upstairs to a bedroom by herself or within a week of starting the Anavex open-label extension, she only had 1 seizure and then she went 3 months without a seizure. So these are a very nice anecdotal confirmation of the interest of proceeding long term with blarcamesine liquid formulation for this horrible disease. Now let me move to the Alzheimer's program which we have completed both the placebo-controlled study as well as the open-label extension study, ATTENTION-AD. I want to highlight on the design of the study that we had 2 arms of active arm, which were target doses and a placebo arm in what turned out and it's very nicely explained and I recommend everybody to look up the paper, the publication that these 2 target doses were actually identical at the end because of the allowing of patients to titrate to the best tolerated dose, which is very common in the studies. So what we are able to do is to demonstrate that there's no need to go to 50-milligram, although the 50-milligram in some patients were superior. But actually, overall, the adverse event compared to the efficacy was completely beneficial and sufficient at 30-milligram. And that's why this is something, which we learn by science, by doing trials, and it's nice to see this confirmation. Also, I want to mention that new guidance provided us confirmation of this trial to be successful since we're able to demonstrate the ADAS-Cog13, which had an allocated alpha of 0.05 as a co-primary endpoint, if it shows an alpha better than 0.025, so half of that, we can then move over the ADL, which is not sensitive enough in this population anymore, and scientific papers confirm that and guidance is both from the EMA as FDA realized that it's not appropriate for this population. So we can now move to the next end point, which is the CDR sum of boxes. But that end point also has to be value less than 0.025, and that was accomplished in our Phase IIb/III study as well as data on MRI as well as biomarkers in CGI-I, which I will share subsequently. Regarding the MRI, it's really important to be aware that the pathology of Alzheimer's is really directly correlated and it's in every science book of Alzheimer, the pictures of the shrunken brain of a patient with Alzheimer's compared to a normal brain. So it's important to be aware of this loss of brain volume is a clear manifestation of the pathology of the true neurodegeneration, which takes place in this horrible disease. And what we noticed is that in almost all regions of the brain from the entire whole brain to the total gray matter to parietal lobe to temporal lobe, limbic lobe, insular cortex and frontal lobe, there is a demonstrated stopping or delay of this decline or this atrophy, better to speak, pathological atrophy compared to the placebo, which continues to shrink in all these regions of the brain. So it's very significant slowing of atrophy in this broad brain regions after 48 weeks is covering what is referred to the N neurodegeneration in the ATN kind of like Abeta, tau and neurodegeneration framework. And we believe we are one of the first compounds demonstrating this ability to halt or delay neurodegeneration in this fashion significantly. Now let me move to the open-label extension study design and also then give you a picture of what we identified as the delayed start analysis. So the placebo-controlled study had blarcamesine in the combined 2 doses, and they were randomized to blarcamesine or placebo over 48 weeks duration. And then the trial completed and the read-out of the placebo-controlled part started. While the patients -- while the physicians became unblinded, the patients never got unblinded. Actually, the physicians also never got unblinded, who received individually the drug or placebo. So the patients or participants in the study kept unblinded as well as the participating investigators. And then they were titrated, they went into a short holiday and then they were up titrated again from scratch from the beginning from 0 to the target dose of best tolerated dose in both arms to blarcamesine. And what is important is that we're able now to develop 2 arms in combination with the open-label study and we refer to that as the continued blarcamesine arm or the early start group because technically, they are starting earlier than those who got placebo when you look at the active arm perspective. So while the other group on the bottom is referred to a placebo to blarcamesine group are the considered late start group from perspective of receiving blarcamesine. And the treatment now continued over a longer period from 48 weeks to a total of 192 weeks, so a total of 144 weeks, which is over 3 years. So in totality is almost 4 years from very beginning to the end. And what we're now looking at is the -- are the 2 arms separated at the end of the trial or are the patients which were on placebo first catching up to those who started blarcamesine first. And the result of this is they did not show the ability to catch up at the end of the study. So the ADAS-Cog13 difference between the 2 arms was minus 3.83 in favor of the early start group and the ADCS-ADL showed a difference of plus 4.30 compared to the early start group, compared to early start group to the placebo and late start group. And both have significant p-values. So the takeaway from this is that the outcome suggests that earlier blarcamesine treatment initiation may have continued long-term beneficial effect. So in a nutshell, you want to start early than later if you have Alzheimer's disease. Another important point to be made is that not only is that highly significant and large in delta but it also is clinically meaningful. That means a physician, a caregiver and maybe also the patient itself is able to notice the difference. A paper recently revealed at an ADAS-Cog13 difference larger than 2 points is considered clinically meaningful improvement. And this delta of minus 3.83 clearly confirms a clinically meaningful improvement, larger than 2 points in ADAS-Cog13. I want to finish by also commenting on this top line data regarding to safety, there was no new safety findings observed with blarcamesine over 4 years, and there were also no debts related to the study drug over the entire period that includes also the placebo-controlled period. And one thing I also want to point out, which had been the only imperfection, if we want to call it, in our Phase II/III study, and we talk about it also in the paper itself is that we were able to demonstrate that the only adverse event which shows up more frequently larger than 10%, especially dizziness was reduced to less than 10% in the open-label extension period. So we have to differentiate between an adverse event, which is a feature of the drug versus an adverse event, which is reported, which is manageable like dizziness. And the reason why the dizziness was higher in the placebo-controlled study, we had included in that study and designed a very short titration period. It ended up not being long enough to allow the brain to adjust to the change to the drug, which, by the way, is a good sign that the drug penetrates the brain some dizziness. And I want to point out, it's not in all patients, and it was only in some patients, but it was also in a few days duration, and it was not meaningfully significant in terms of severity, it was mostly grade 1 and grade 2. But this titration extension, which we implemented a priority in the extension study from 2 weeks to 10 weeks, allowed for a significant drop of the dizziness observation less than -- to less than 10% in the open-label study, demonstrating the ability to address these adverse events which were, of course, recorded in the placebo-controlled study. And to put this in perspective on comparison, when you look at a table of adverse event of an antibody trial, LEQEMBI or donanemab, you see that ARIA levels are, I think, in the range of 30%. And no matter how the drug is administered, this level of adverse events will always be 30%. So because that is a feature of the drug, ARIA as a feature of the antibodies. And dizziness in our trial is not a feature of the drug, which cannot be changed. It can be amended by a longer titration and that is important for the real world implication how this drug might be utilized. Something to put this in perspective. So in summary, we can really say we have an advantage of an all administration with a novel target upstream of Abeta and tau with a more complex, addressing the complexity of the pathology by helping the body to help itself but also able to restore hemostasis and reduce Abeta, which we demonstrated in the trial and also neurodegeneration. So these promising clinical trials were now published in this paper JPET, which you see here a picture of. And I also want to point out that this is the oral pill on the right, you see that is right now the capsule used in the trial. So now we'd like to move to some other features of the company like IP and expansion of the commercial foundation. So we have started given the high demand from Alzheimer's disease patients and families for easy access and scalable treatments to educate the population and investigators. And we intend also -- which are intended to reduce the need for complex procedures for ultimate disease participants. And it goes without saying that blarcamesine once all daily versus challenging biological antibodies seems to be a preferred application and alternative. So we are now starting to engage effectively in examining innovative strategy to reach out investigators and providers. And we have also started to schedule meetings with payers in order to explore pricing potential in Europe. In summary, also the population is really growing in Alzheimer's disease worldwide. And there's every other year or every year, there's a new data, increasing this number of existing patients in the U.S. right now. The recording is 6.9 million. In Europe, it's 7 million; and in Asia, it's 23 million and global is 35 million, followed by Parkinson's disease with 1 million in the U.S.; 1.4 million in Europe; 3 million in Asia; and 10 million global. And so schizophrenia is a very large population as well with 1.6 million in the U.S.; 3 million in Europe; and 9 million in Asia; and 24 million globally and other rare diseases are described as well in the summary slide. I'd like to also leave you a little bit with an important factor about our patent portfolio and patent protection philosophy. We've been very adamant to protect our drugs and our composition of method. And we have really wide international patent protection up to 2038 for all our product candidates worldwide and globally in order to capitalize on the valuable pipeline and the global opportunity in order to bring lead therapies to patients in Europe, in Asia Pacific and the U.S. following regulatory discussions. So now let me move to a discussion about our disciplined operation and efficiency in key housekeeping with cash. we are really privileged to have, at this point in time, no debt in our balance sheet. We have an estimated runway of 4 years right now giving our cash position as the last quarter recorded of over $130 million. And if you divide this by the last year fiscal year cash utilization, you can derive to that number. And the reason for that is we want to really be very efficient because we want to help patients and keep the company's sustainable. And we like to think at this point, which would not have been possible without the support from nondilutive funding, especially for the Michael Fox Foundation, which supported us really greatly in the Parkinson's disease franchise as well as from the International Rett Syndrome Foundation, which supported us really generously for the Rett Syndrome program and also from the Australian government that we received nondilutive funding. I also want to highlight at this point, the great background and support from existing management team. And I want to highlight, especially today, Juan Carlos Lopez-Talavera, who is our Head of R&D. He's MD and PhD with a background from large pharma from AbbVie, Bristol-Myers Squibb and Roche. And is actually one of the team members today here in this room. So I'm very pleased that he joined us. But again, great team also to work with in the Anavex team. Last not but not least, I also want to point out the great support from key opinion leaders, which we have built, and we have more to come, more interested in joining this group and especially in the respective areas of expertise. And I want to highlight, especially the investigators who participated in the study which was Timo Grimmer. But also I'd like to highlight the senior author of the paper, Marwan Sabbagh, which is from the Barrow Institute. Again, great thanks for everybody in that regard. And I want to leave that really summarizing that Anavex's advantage really is this precision medicine platform, which allows for a scalable opportunity. And ultimately, we have to appreciate that the global health care system is really getting expensive and more expensive and needs to really stay in tune with the benefit. And so one of our goals is really to provide an equitable and also accessible product and solution for diverse populations and maintain sustainability within the global ecosystem, which encompasses all jurisdictions in the world. And a small molecule can be shipped very easily to every part in a country like Poland or Romania, while other approaches, which requires more complex procedures and are more cost invasive. For example, the MRI measures and the PET scan measures needs to be added to the cost of the drug itself. So our solution would not require this additional safety observations and will be straightforward. And that's what we're excited about to move forward this year. And we like to thank you for your support and more information is giving at the website, www.anavex.com. And thank you very much for your attention. I appreciate it.

Thanks, everyone, for joining again. This now concludes the Anavex presentation at JPMorgan Healthcare Conference.