Anavex Life Sciences Corp. Q3 FY2025 Earnings Call

Good morning, and welcome to the Anavex Life Sciences Fiscal 2025 Third Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. Please note, this conference is being recorded, and the call will be available on Anavex's website at www.anavex.com later today. 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, including, without limitation, the company's Forms 10-K and 10-Q, which identify 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. 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. Our development of non-invasive targeted upstream compounds continues to advance, particularly in the context of Alzheimer's disease and schizophrenia. Clinical feedback highlights the importance of orally administered therapies that are both accessible and effective. At the recent Alzheimer's Association International Conference, AAIC 2025, we presented open-label extension data for blarcamesine, which demonstrated continued clinically meaningful benefit in early-stage Alzheimer's patients, further validating its therapeutic potential. In June 2025, a survey of Alzheimer's disease stakeholders from European Union member states on current unmet needs in Alzheimer care was conducted. There is a clear acknowledgment that oral therapies would facilitate things for many countries and be much more accessible for the respective healthcare systems, potentially requiring less extensive monitoring and complex administration compared to injectable monoclonal antibodies. This modality difference is seen as a key factor in potential broader market penetration. At the end of July, Anavex was honored to be a part of the program at the 2025 Alzheimer's Association International Conference, AAIC in Toronto. The sharing of knowledge at these central events is important to help advance dementia science to better support the millions of individuals, families, and communities impacted by Alzheimer's disease. At the AAIC 2025 conference, we were pleased to present the latest findings for blarcamesine. The data were presented by Marwan Sabbagh, Professor of Neurology and Chairman of the Advisory Board of Anavex. The data showed that blarcamesine-treated patients continue to accrue benefit for up to 4 years as measured by the prespecified clinical endpoints, ADAS-Cog13 and ADCS-ADL, respectively. Further presentations at the AAIC 2025 conference featured prespecified precision medicine Phase IIb/III 48-week ANAVEX 2-73-AD-004 double-blind clinical trial data on blarcamesine, confirming the upstream mechanism of blarcamesine restoring impaired autophagy as an early event preceding amyloid-beta and tau. 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 so much, Christopher, and good morning to everyone on the call. I'm pleased to share with you today our third quarter financial results for our 2025 fiscal year. Our cash position on June 30 was $101.2 million, and we had no debt. During the quarter, we utilized cash and cash equivalents of $12.5 million in operating activities after taking into account changes in noncash working capital accounts. As of the quarter end, we anticipate, at the current adjusted cash utilization rate and range, an approximate runway of more than 3 years. Our research and development expenses for the quarter were $10 million, as compared to $11.8 million for the comparable quarter of last year. General and administrative expenses were $4.5 million, as compared to $2.8 million for the comparable quarter of last year. Compared to the same quarter of fiscal 2024, an increase in noncash compensation charges was offset by a decrease in overall cash operating expenses due to the completion of a large manufacturing campaign of blarcamesine to support execution and potential commercial readiness as we advance our therapeutic pipeline. Lastly, we reported a net loss of $13.2 million for the quarter, or $0.16 per share. Thank you, and back to you, Christopher.

Thank you, Sandra. In summary, we are focused on continuing to advance our precision medicine compounds. We're excited to be potentially making a difference for individuals suffering from these diseases by presenting a scalable treatment alternative alongside the ease of oral administration. I would now like to turn the call back to Clint for Q&A.

Thank you, Christopher. For our first question today, it will be from Soumit Roy from Jones Research.

Christopher, I have a quick question regarding the four-year data. Could you clarify if the delayed start patients were from the placebo arm or the randomized trial? Also, in relation to the graph, I noticed that the Cog13 readout doesn't separate until 96 weeks, which is about two years, compared to the ADL. Is there something specific happening there?

So it's a good question. So you're referring to the 4-year open-label extension data. Yes. So let me quickly explain again what is done. The patients are randomized at the beginning of the trial to either receiving placebo or active arm. Those patients who then finish the 48 weeks will get blarcamesine, all of them. Those patients who started blarcamesine, but they were blinded to it, didn't know, also stay blinded when they receive blarcamesine if they were receiving blarcamesine in the previous 48 weeks. They are called the continued blarcamesine or early start group. Those patients who now, after they had placebo because they were randomized to placebo in the first 48 weeks, now receive blarcamesine. What we now look at is the trajectory of the 2 arms, the early start group, which had blarcamesine since day 1 and those we call the late start group, which had blarcamesine after the placebo-controlled part. What we find is that those patients who received the drug later after placebo first do not catch up to the benefit of those patients who had blarcamesine from day 1 in the previous 48 weeks. That indicates that if you have Alzheimer's disease, you want to not get it too late because you will not get the full benefit of the drug. The same applies for both cognition, ADAS-Cog13, and activities of daily living or function ADCS-ADL. What we noticed was because of COVID, there was not a perfect transition from the end of the trial of 48 weeks into the open-label extension because sites were shut down. The patients were just barely able to measure the last measure of 48 weeks, but the open label was not accessible until, in some cases, a year later. Those patients eventually joined. We found that we could basically separate 2 groups, those patients who were not impacted by COVID, so to speak, by this shutdown trial sites, specifically those who had the best performance among all candidates. Those patients who got the drug after a longer pause or drug holiday, we call it also or interruption, they did not benefit as much even if they had previously the drug in the active arm in the placebo-controlled part. The takeaway is twofold. First of all, you want to take the drug as soon as possible once you have an indication and diagnosis of Alzheimer's disease. Secondly, once you start taking blarcamesine, you want to continually take it and not interrupt it for too long because that would also be not a perfect outcome to keep cognition and function consistently better. To answer your question about this difference between ADAS-Cog13 and ADL, I think because of these ADAS-Cog13 is more sensitive to immediate actions and ADL has a bit of maybe a latency, the ADL seems to be more smooth in their trajectory than the ADAS-Cog13. The ADAS-Cog13 is just more sensitive possibly to these changes. The description in the conference in the graph on the slide shows clearly that those patients who were not interrupted, or had a short interruption, had a clearly better outcome in the active arm than those who had interruption, what I just basically said a minute ago. I trust that helps to explain the difference.

No, that was super helpful. Were the patients at the beginning of the open-label extension restaged? Were they still mild stage patients or some of them progressed to moderate?

Certainly, some patients have made progress, particularly those in the placebo group, but we allowed all patients who voluntarily participated in the trial to continue, regardless of their progress or if they moved to a more severe form of dementia. Most of them chose to continue.

But they were not restaged to assess if they are still mild AD or moderate?

There was no need to because they were eligible to continue to stay on the study drug. So irrespective of the staging. Does it make sense? So it's not taking away the ability to continue to stay on the study drug.

No, I was wondering if your drug could even be applicable to the moderate stage patients?

So we have seen that actually in the Phase IIb - Phase IIa study, which was published in 2020, that patients with mild to moderate, so more advanced stage, also benefited from blarcamesine. In a way, we have confirmed a broader therapeutic window for not only early Alzheimer's disease but also mild to moderate.

One last question. Any guidance on the EMA review or commentary back?

So we stated that we would not provide comments until the final feedback or review is completed, and we stick to that, but we are excited about the progress.

Is that a 10-month review? Could you help us understand the timeline filed in November last year?

It was filed in November last year and accepted in December. There is some variability in the timeline that can be influenced by unforeseen factors. We anticipate that in the first quarter of next year, we should be able to provide feedback regarding the EMA's response.

The next questions will come from Tom Bishop. Tom, you're connected; I think you just need to unmute.

As near as I know, the company has only 3-71 in a clinical trial right now. Is that right?

That's correct. We have in compassionate use, though, we have ANAVEX 2-73 or blarcamesine in Alzheimer's disease right now ongoing.

So are all people that were in a prior trial allowed to stay on it basically, even if it's an open-label extension officially, but like all those?

Yes, so we have started the trial in Australia, and those patients were the first ones to finish the trial, including the open-label extension study, and those were the ones who asked for a continuation. That started also with the Phase IIa study in Australia. So Australia has right now patients up to 9 years, including the Phase IIa patient population. Some of them continued to take the drug every day since 2014.

But those on the open-label extension are also still on it?

The ones in Australia, correct. In Australia, yes.

No, I mean the full open-label...

Not all of them, only those in Australia continued because the other study participants finished after the open-label extension.

Okay. So I noticed that R&D spending is still like $10 million. I'm wondering where that's all going, whether you could run down what people are working on to put some meat on that bone and sort of go down through the pipeline in that regard, Parkinson's, Rett, schizophrenia, Fragile X, that would be very helpful to see what's...

Part of this is going into the preparation for manufacturing. We have a larger amount for the manufacturing of blarcamesine for the CMC and the preparation of the trials, which we said we would anticipate to start, that is a Parkinson's disease study. This is a Fragile X study in another rare disease. All of these are also preparation expenses included in this R&D quarter outcome.

Yes, now it's been quite a while since the last Parkinson's study ended. I'm just wondering what's holding that back or whether you're waiting for EMA results or whatever?

No, it's more like the Parkinson's area has gone through a very dynamic shift in understanding of the disease. Given our recent precision medicine analysis, finding in Alzheimer, we want to really increase the chance of success of this Parkinson's trial as well. One of the things that make it challenging in Parkinson's disease is that L-dopa is a very good drug and patients with Parkinson do get L-Dopa. You have to understand that if you get L-Dopa, and change the dose in the middle of the trial, those patients are no longer eligible to be included in the analysis. So you lose power and you have to adjust for that. We have to find a way to avoid that from happening. We are trying to find the best way to design the study to increase the chance of success, and that's the reason why we are being thorough and not jumping right into it.

Okay. And Rett?

We are really excited about the Rett program and what we have accomplished so far. I believe that once we have more clarity on the submission related to Alzheimer, we will consider that again in the future.

Okay. And regarding the EMA decision, will there be an equivalent of like an FDA advisory committee opinion before that EMA advisory committee, so to speak?

I think it works a bit differently. The EMA makes a decision based on all participating countries in Europe, which are 27. Everybody has a vote, and that's how they make the CHMP recommendation and the European Union parliament then either adopts it or changes the view on that. Mostly, they adopt it. That is how the assessment is done in the European filing.

Okay. So putting it another way, will we get some preliminary information from the EMA up or down before the final EMA decision is rendered?

I think the final decision will be rendered only after the CHMP provides their recommendation to the EMA. Then the EMA or the European Union makes the recommendation or the approval. There is no interim or whatever. There will be, as I pointed out before, probably, in the first quarter of next year, a result.

So that is the last question, Dr. Missling. I'll turn it back over to you.

Thank you very much. In closing, so we'd like to continue to focus on execution and potential commercial readiness as we advance our therapeutic pipeline to potentially improve patients' lives living with these devastating conditions. I'd like to thank you, and good morning to everybody again.

Thank you, ladies and gentlemen. That will conclude today's conference call. Thank you for participating. You may now disconnect.