Anavex Life Sciences Corp. Q1 FY2025 Earnings Call

Good morning, everyone, and welcome to the Anavex Life Sciences Fiscal 2025 First Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. At this time, all participants are in a listen-only mode, and later, we will conduct a question-and-answer session. Note that this conference is being recorded. The call will be available for replay on Anavex's 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 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, the 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. I would like to point out that we are receiving growing support from stakeholders for the potential to advance a novel precision medicine treatment for early Alzheimer's disease with convenient oral dosing and with potential clinically meaningful benefit. We are excited to be potentially making a difference for individuals suffering from Alzheimer's disease by presenting a scalable treatment alternative alongside the ease of oral administration. Last month, we provided top-line long-term data from the Phase 2b/3 ATTENTION-AD open-label extension trial. The data demonstrated that over three years of continuous treatment with blarcamesine significantly reduced clinical decline, showing continued clinically meaningful benefit for early Alzheimer's disease patients. Also in January, we announced that The Journal of Prevention of Alzheimer Disease, JPAD, published the peer-reviewed detailed results from the Phase 2b/3 study evaluating oral blarcamesine for the treatment of early Alzheimer's disease. Once daily oral blarcamesine demonstrated a safety profile with no associated neuroimaging adverse events significantly slowed clinical progression by 36.3% at 48 weeks in the blarcamesine group, as well as the pre-specified SIGMAR1 wild-type gene group by 49.8% at 48 weeks on the pre-specified primary cognitive endpoint ADAS-Cog13 respectively. The peer-reviewed publication of these data underscores the significance of the findings for both the scientific community and those focused on Alzheimer's disease. Alzheimer's disease is a highly complex condition, and this dataset plays a crucial role in advancing our understanding of the Phase 2b/3. We are grateful for the dedication from participants, the families, and the sites for taking part in this important study. Finally, at the end of January, we announced that Anavex was issued a new composition of matter U.S. patent expected to remain in force at least until July 2039, entitled A2-73 CRYSTALLINE POLYMORPH COMPOSITIONS OF MATTER AND METHODS OF USE THEREOF from the United States Patent and Trademark Office. This new patent claims crystalline forms of the dihydrogen phosphate salt of Anavex freebase, as well as transdermal patches and enteric-coated oral dosage forms including the same for neuroprotection and treatment of neurodegenerative disorders, including Alzheimer's disease, Parkinson's disease, and other disorders. The issuance of this U.S. patent again showcases our expertise in identifying and pursuing novel therapeutic forms and formulations that are rooted in science. With respect to ANAVEX 3-71, which will now include more participants at the longer treatment duration within Part B. Anavex expects data from the ongoing Part B of the placebo-controlled Phase 2 study in schizophrenia in the first half of 2025. 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. Good morning, everyone. I'm pleased to share with you today our first quarter financial results for the 2025 fiscal year. Our cash position at December 31 was $120.8 million and we had no debt. During the quarter, we utilized cash and cash equivalents of $12.1 million in operating activities after taking into account changes in non-cash working capital accounts. As of quarter-end, we anticipate at the current cash utilization rate and range a runway of approximately four years. During our most recent quarter, general and administrative expenses were $3.1 million as compared to $2.7 million for the comparable first quarter. Our research and development expenses for the quarter were $10.4 million as compared to $8.7 million for the comparable first quarter. And lastly, we reported a net loss of $12.1 million for the quarter or $0.14 per share. Thanks, and back to you, Christopher.

Thank you, Sandra. In summary, we are receiving growing support from stakeholders for the potential to advance a novel treatment for early Alzheimer's disease with convenient oral dosing and with potential clinically meaningful benefit. We are very excited to be potentially making a difference for individuals suffering from Alzheimer's disease by presenting a scalable treatment alternative alongside the ease of oral administration using precision medicine. I would now like to turn the call back to Clint for Q&A.

Thank you, Christopher. We will begin the Q&A session now. And it looks like the first question is coming from Tom Bishop. Go ahead, please. Tom, can you hear us?

Can you hear me now?

I can hear you now, Tom.

Good. And with regards to the next few months, I guess, we're hoping for some word from Europe around mid-year or is that the timeline? I thought I heard six months, but then I heard maybe it could be longer?

So we will expect the review to take 210 days since filing, which was in November last year, and it was accepted in December in the following month less than 30 days after the filing. So we are prepared for this review, and we're looking forward to it.

So, that would be like July-ish or maybe September?

We expect the feedback for the review to complete by the end of this year. And I don't know more specifics at this time. So that's why we are ready to prepare for.

Okay. Now, was there any discussion about a priority review of any sort or that ship has sailed?

The requirement for that is a prime status. And since we filed without the prime because we were encouraged to file without the prime because of the unmet need. This is a procedure which is 280.

Okay. And also what are the upcoming events that we can look forward to? I guess, we have the 371 trial due sometime before mid-year.

That's correct. So we expect ANAVEX 3-71 schizophrenia readout, as we mentioned, in the first half of this year. Then we also are expecting a scientific presentation of detailed data of the open-label extension study, ATTENTION-AD in April at the AD/PD conference, which we toplined last month and the details will be presented at this conference. Then further, we will provide updates on the pipeline. We expect updates on the Parkinson's disease program and other subsequent programs as well.

You said you are receiving increasing interest or increasing support. And I was just wondering if you could elaborate on that one?

We are getting support from stakeholders; that is advocacy groups across the board, and that's very encouraging because of the unmet need in the current limited availability of scalable drugs for this horrible condition. That includes advocacy groups in Europe and around the globe.

Okay. And how about from other pharmaceutical companies? I mean, if this was approved, you need to start to market it in Europe and produce it and all that. And I guess, one thing people point to is that there's been no hint yet of any interest from a pharma company. So, I'm just wondering, I think, the company has just been quiet about it.

Yeah. That's not accurate; of course, there's ongoing discussions, and we initiated that last month at JPMorgan. And also regarding the material for marketing the drug, we have enough supply for launching this drug. The manufacturing has been extremely productive to have marketed products ready for the market entry. Regarding how to move forward in terms of a sales force or a partnership with a pharma company, this is decided on the terms of those discussions. The deciding factor, the guiding factor, will be creating the most shareholder value for shareholders. So, whatever is in the interest of shareholders, that path will be taken. But there's no doubt if there is a drug approved for such an indication, there will be a lot of interest.

Also, what is the status of Rett syndrome?

We have decided to conduct another study on Rett syndrome to reconfirm our findings, as the previous study had a limited number of patients and a small placebo group, which affected the volatility of the endpoints. Therefore, we are planning another study on Rett syndrome, and we will provide updates throughout this year.

Okay. It's been a while since that last trial ended, so I'm just wondering what's...

We are mindful of the process, and we also like to focus on what is most creating the most value right now. This is the Alzheimer program, and the filing for the Alzheimer indication was the most priority for us in the last few months.

Okay. And you mentioned the crystalline patent, and I was just wondering how significant is that? It was hard to tell.

It's actually very significant, and I think that should be pointed out. Thanks for asking the question, that this crystallized patent API was actually used in all prior clinical studies. So it's not a new patent, which has been suddenly identified as a patentable composition of matter, but these trials, which we ran in Alzheimer's disease were all utilizing these compositions of matter of the patent, which expires at the earliest in July 2038 or 2039. And that's very important because that means our composition of matter is protected for the entire spectrum of these indications, including Alzheimer's disease, as well as Parkinson's disease for the capsule or the tablets used with the respective API, which will be the case as well in the market.

That is very good news then. Also, any update on Parkinson's?

Yeah. As I said, we will update the Parkinson's program. We had interaction with regulatory bodies, and we will provide an update accordingly shortly about how to proceed with the Parkinson's disease program.

Anything on the FDA, as far as blarcamesine goes?

For Alzheimer's disease, we are planning to have a meeting, and that is what we did with EMA, with the dialogue with a very open dialogue in a meeting to request and share the data and asking what is the recommended procedure for us to proceed, and we're looking forward to this interaction.

Okay. Great. And are the OLE patients still on the drug or?

They are actually; we mentioned it at the last press release when we highlighted the OLE data that the 74 participants are still on study drug under the compassionate use program, and we will also follow up with them for real-world evidence and we expect data from that as well going forward. So that's very encouraging that after four years of total intake of the drug in the placebo-controlled part as well as in the open-label part, patients still continue to take the drug and are requesting to be on study drug, and we are able for that reason to use this additional population for real-world evidence potentially. And so far, nobody has died from the drug in our study and outside of the study, and that's actually preceded the Phase 2/3 that includes also the Phase 2a, which started over nine years ago. So over nine years that there has been no death caused by the drug.

The drug is just amazing, and its advantages over these infusion therapy drugs, and I'm just very excited. Well, thank you for asking and answering my questions.

Thank you.

Thank you, Tom. There's another question here, Dr. Missling, if you would like to provide a brief overview of efficacy compared to the monoclonal antibodies.

It’s crucial to emphasize the need for clinical significance, which we recently detailed in our 2024 publication and referenced in our recent efficacy data press release related to the open-label study and the publication in JPAD. The clinically meaningful threshold is a 2-point or greater change in the ADAS-Cog score. Our trials showed an ADAS-Cog13 score of 2.03 across all participants, signifying clear clinical relevance as patients, caregivers, and physicians can recognize these changes. Any score below this threshold would not be noticeable. Over 48 weeks, our ADAS-Cog13 achieved this 2-point improvement. In comparison, Lilly’s Kisunla or donanemab showed only a 1.35 delta from placebo, which falls short of the 2-point clinically meaningful threshold and was reached much later. Therefore, blarcamesine allows for earlier identification of improvement in comparison to placebo. Additionally, as a once-daily oral treatment, it aligns more closely with the disease's complexity than other drugs, like monoclonal antibodies, which target later pathways in the disease process. While some media has critiqued this approach, we view blarcamesine as a potentially complementary therapy to existing treatments, including monoclonal antibodies and standard medications like donepezil and memantine, which showed improved results when used alongside blarcamesine in our trial. Essentially, our treatment enhances the standard care available during the trial. Importantly, the healthcare ecosystem would benefit from the scalability of a once-daily oral medication, avoiding the serious risks associated with monoclonal antibodies, which have black box warnings due to potential fatalities. Prescribing these antibodies requires considerable caution from physicians and entails patient monitoring and mandatory MRIs every three weeks, creating logistical challenges due to the limited availability of MRI facilities, particularly in the Midwest. This complicates the uptake and broader application of these antibodies across diverse patient populations, a challenge that could be alleviated with oral medications like blarcamesine.

Well, thank you for that. Another question, and I think it's the last one here, is assuming an EMA approval, what other countries may follow and open their markets to blarcamesine?

So we are planning to submit to other jurisdictions, among them in the UK and others, Canada and Australia have been also participating in this trial. That will probably happen before the end of the year. So we are expanding this, and I mentioned the plan for the U.S. as well, which will be a dialog with the agency as well. So we are expanding the jurisdictions beyond EMA because of the unmet need.

Excellent. Thank you. I believe that's all the questions at this time, Dr. Missling.

Thank you. So, in closing, we'd like to continue to focus on execution and commercial readiness as we advance our therapeutic pipeline to potentially improve patients' lives with these devastating conditions. I'd like to thank you for your attention. Thank you.

Thank you, everyone for joining the call today. This concludes our conference call. We appreciate your participation. You may now disconnect.