Anavex Life Sciences Corp. Q4 FY2025 Earnings Call

Good morning, everyone, and welcome to the Anavex Life Sciences Fiscal 2025 Fourth Quarter Conference Call. My name is Clint Tomlinson, and I'll be your host for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. And during this session, if you would like to ask a question, please use the Q&A box or raise your hand. Please note that this conference is being recorded, and the call will be available for replay on our website at www.anavex.com. With us today is Dr. Christopher Missling, president and chief executive officer, and Sandra Bohnish, 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 that include, 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 to obtain future capital, and the maintenance of intellectual property rights. This conference call discusses investigational uses of agents in development and is not intended to convey conclusions about efficacy or safety. And there is no guarantee that any investigational uses of such products will successfully complete clinical development or gain health authority approval. And with that, I would 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 Q4 financial results and quarterly business update. We are fully committed to bringing Oral Blacaramazine and oral ANAVEX 371 to patients. We are dedicated to delivering on the value of our pipeline and maximizing its potential for patients, investors, and our employees. Over the coming months, we will continue to focus on progressing our clinical trials and regulatory actions. At the same time, we're aiming to expand our collaborative initiatives and strategic partnership activities. As previously announced, through our update on the status of the regulatory filing of Blacaramazine in Europe, we expect the CHMP to adopt a negative opinion on the MAA at its December meeting. We intend to request a reexamination of the CHMP opinion upon its formal adoption based on feedback and continued guidance from the CHMP, EMA, and the Alzheimer disease community. DMA procedures adopted by the CHMP allow an applicant to request reexamination of its decision, which would be undertaken by a different set of reviewers that conduct a new examination, independent from the first opinion. Our expert advisers, investigators, as well as patients and their caregivers encourage us in our commitment to continue working in partnership with global regulatory bodies to advance science and potentially new treatment options for patients and their families. As part of the MAA review process, we have successfully undergone a full Good Clinical Practice (GCP) inspection of the trial data by EMA. The manufacturing package has passed the EMA review as well. A good clinical practice GCP inspection is an official review by a regulatory authority over clinical trials documents, facilities, records, and other resources to ensure compliance with GCP guidelines. We're looking forward to working closely with EMA and other stakeholders to advance our investigational therapy for early Alzheimer disease. Importantly, we also announced we had initial contacts with the authorities in the US regarding our Alzheimer's disease program. And we intend to provide further updates on our interaction with the FDA as they become available. Going forward, we will provide both regulatory and clinical trial updates on Dacamazine in other indications, such as Parkinson disease, Rett syndrome, and fragile X. This will include the disclosure of planned future clinical trial designs as we continue to advance our therapeutic pipeline. During the most recent quarter, we announced several new scientific and medical publications including a peer-reviewed publication in the journal Neuroscience Letters, titled Prevention of Memory Impairment: in Hippocampal Injury with Blacaramazine in an Alzheimer's disease model. This study shows that pretreatment with Blacaramazine prevented amyloid beta-induced memory impairment and brain oxidative injury, suggesting that Blacaramazine is an attractive candidate for Alzheimer disease pharmacological prevention. A peer-reviewed publication in the journal Eye Science asserting the precise autophagy mechanism of sigma one receptor through Blacaramazine activation titled conserved LI R specific interaction of sigma one receptor in GABA RAB. A publication oral glycogen phase two b/three trial confirms identified precision medicine patient population significant broad clinical and quality of life improvements for early Alzheimer disease patients. To be available online as a preprint and in submission to a peer-reviewed medical journal. Anavex announced the latest published scientific results for Blacaramazine. On all standard scales for measuring Alzheimer's disease and cognitive decline after forty-eight weeks, the defined precision medicine population ABCEAR three, consisting of early Alzheimer's disease patients with confirmed and progressed pathology taking thirty milligram once daily oral Blacaramazine demonstrated barely detectable decline. This was comparable to minimally perceptible decline in prodromal, which is pre-dementia, aging adults. On October 29, we announced additional long-term clinical data for Blacaramazine. This new data demonstrated continued long-term benefit from oral Blacaramazine compared to the decline observed in the Alzheimer disease neuroimaging initiative control group, also called ADNI, a control group established by a clinical research project launched by NIH in 2004. In the intent to treat population, significantly less cognitive decline was observed for the Blacaramazine participants compared to the ADNI control group at forty-eight weeks, with a significant and clinically meaningful difference in mean change from baseline at ADAS-COG 13 total score of minus 2.68 points. Over the course of the open-label extension study, at time point ninety-six weeks, these two groups further diverged sharply with statistically significant differences in mean change in ADAS-COG 13 total score at ninety-six weeks of minus 6.41 points. The difference between groups continues to increase at one hundred and forty-four weeks to ADAS-COG 13 total score difference of minus 12.78 points. The results provide evidence of the significant beneficial therapeutic effect of Blacaramazine which positively separates from the ADNI control group with duration of treatment. This significant beneficial therapeutic effect of Blacaramazine compared to decline observed in the ADNI control group translates into seventeen point eight months of time saved with oral Blacaramazine, allowing for longer independence of the patients by approximately over one point five years. Looking ahead, Anavex will be presenting additional data and scientific findings at upcoming conferences and in publications. These include the direct relationship between cognitive function and reduced brain region atrophy with Blacaramazine. Oral Blacaramazine for early symptomatic Alzheimer's demonstrating robust effect size through precision medicine and analysis of the ANAVEX 273 AD024 randomized trial. Also, newly identified precision medicine gene collagen 24A1, with over seventy percent prevalence, establishes effective treatment of early Alzheimer's disease with Blacaramazine. Additionally, continued long-term benefit from oral Blacaramazine compared to delayed start analysis and decline compared to natural history studies. With regard to ANAVEX 371, in October, ANAVEX announced positive top-line results from its placebo-controlled Phase two clinical study, evaluating ANAVEX 371 for the treatment of schizophrenia in adults on stable antipsychotic medication. The study successfully achieved its primary endpoint demonstrating that ANAVEX 371 was safe and well-tolerated. The safety profile was consistent with previous studies of ANAVEX 371 in healthy volunteers. With no serious or severe treatment-emergent adverse events reported in either Part A or Part B of the study. In addition, to meeting the primary safety endpoint, secondary and exploratory analysis revealed encouraging trends in several outcome measures. Our other oral medicine candidate ANAVEX 371 represents therefore, a transformative opportunity in neuropsychiatric drug development, leveraging its unique dual sigma-one agonist mechanism to address multiple high-value indications through a unified neuroinflammatory biomarker platform. Further detailed analysis of randomized, strictly double-blind, and placebo-controlled clinical trial under DEX371 SZ001 revealed very encouraging data in schizophrenia patients. Following successful Phase two results from the SZ 001 study while confirming the safety profile of ANAVEX 371, the study demonstrated a reduction in GFab NYLK40 neuroinflammatory markers. GFab is a structural protein of astrocytes in the brain, representing aberrant activation of astrocytes, which are a major brain glial cell lineage. Astrocytes participate in brain neural function in multiple ways, among them, critical modulation of synaptic relay between neurons in neural circuits. Its dysfunction is a key pathogenesis mechanism in schizophrenia. This positions ANAVEX 371 to advance into pivotal trials with the once-daily modified release oral tablet enabling once-daily dosing across depression and psychosis indications where current therapies have failed or shown limited efficacy. In addition to schizophrenia, one high unmet need opportunity would be depression in Alzheimer's disease, with currently no approved therapies. Up to forty percent of people with Alzheimer experience significant depression, especially in the early and middle stages of the disease. Depression in Alzheimer's is associated with worse quality of life, accelerated cognitive decline, and earlier onset of dementia symptoms. The neuroinflammatory biomarker strategy positions Anavex 371 to potentially achieve disease modification claims beyond symptomatic treatment, representing a paradigm shift in neuropsychiatric drug development.

Thank you, Christopher, and good morning to everyone here. I'm pleased to share with you today our fourth quarter financial results for our 2025 fiscal year. Our cash position as of September 30 was 102.6 million, and we had no debt. During the quarter, we utilized cash and cash equivalents of 8.6 million in our operating activities. After taking into account changes in non-cash working capital accounts. As of today, with a current cash balance of over 120 million, we anticipate that at the current cash utilization rate, our cash runway is more than three years. Our research and development expenses for the quarter were 7.3 million as compared to 11.6 million in the comparable quarter of last year. General and administrative expenses were 3.5 million as compared to 2.7 million for the comparable quarter of last year. Compared to the same quarter of fiscal twenty twenty-four, we saw a decrease in operating expenses mostly driven by the completion of a large manufacturing campaign of Blacaramazine and a decrease in clinical trial activities as a result of the completion of our open-label extension studies and our ANAVEX 371 Phase two study in schizophrenia. Lastly, we reported a net loss of 9.8 million for the quarter, which is $0.11 per share. Thank you. And now I will turn the call back to Christopher.

Thank you, Sandra. In summary, we are focused on continuing to advance our precision medicine compounds. We are 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, Kasr. 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. It looks like our first question is from Michael Obadiah from HC Wainwright. Hello. Good morning. So are we asking the questions on behalf of Ram Selvaraju from H. Wainwright? Have a couple of questions for the management. And the first question is, what is the likely commercial impact of the failure of semaglutide on the outlook for Glycogenesine in Alzheimer's disease? Second one is when is the next formal discussion of Blacaramazine scheduled to take place with the FDA? And the third question is, what initiatives does INOVIX plan to pursue in the near term for Glycogenesine approval in regions beyond the European Union and the United States? Thank you.

I appreciate the questions. So to answer the first question about the impact of the semaglutide results. We understand there's an unmet medical need here. And this is certainly further highlighted by the recent setback by the two EVOQUE studies from Novo Nordisk and also by other companies, including other large pharma companies recently, with anti-tau injectables. So there's a lack of upcoming pipeline certainly. We also understand that the Evoque semaglutide GLP-1 finding highlights the complexity of Alzheimer disease biology and the challenges of expecting metabolic pathways alone to meaningfully alter your dinner processes. But Alzheimer's is more complex, involving impaired proteostasis, autophagy dysfunction, synaptic failure, and multiple converging mechanisms. So therapeutic effects seen in related conditions do not always translate into a benefit here. However, we have oral once-daily Blacaramazine with this upstream mechanism of action, which restores autophagy, which precedes these pathologies. This has been clinically demonstrated in early Alzheimer's disease patients showing clinically meaningful efficacy of slowing cognitive decline by significant amounts, in some cases over fifty percent, with an acceptable safety profile with no ARIA, as demonstrated in the Phase two b less free study. So the answer to the question is that this makes it more clear that this is a complex disease and there's a lack of compounds available near term for patients to address this unmet need. The second question is about timing. We will provide updates as we stated, regarding our initial discussions with US regulators, and we will provide updates as we receive them. But we're very excited about the initiation of these discussions. Regarding the third question, we are continuing to explore other regulatory geographies, as well as moving forward where we can see fit to address open questions. So I trust this addresses the question.

Yes. Thank you very much for the clarity and transparency.

The next question is gonna come from Tom Bishop at BI Research. Tom, you need to unmute.

Per the press release, the CHMP seems to have given you some guidance about the additional information they need to see, for example, biomarker. But can you elaborate on what this includes?

So we want to proceed with the reexamination. Because we owe it to the patients, and we get feedback from investigators that the unmet need is very high. And it boils down to the CHMP assessing the benefits versus the risks of the drug to be on the market. And that discussion includes all available data. It might be, to make the glass half full, that the biomarkers, which are not subject to influence, might help in getting to that point. So that is the background of including biomarker assessments.

Well, there was no particular biomarkers that you hope to bring out?

We have communicated, and it's been published that we have a strong biomarker of the pathology. This is analogous to oncology where tumor growth is measured objectively, and can’t be influenced by a patient or by anybody else. The same in Alzheimer's disease where the brain shrinks. We can measure that objectively, and it signifies the neurodegeneration, and we demonstrated that this marker of neurodegeneration is significant, indicating less or even halted progression in some patients with active oral Blacaramazine. While in the placebo arm, the brain continues to shrink, which clearly defines the advancement of the Alzheimer pathology. We would like to include this in the discussion.

What about the ABC Clear data? I mean, that was very compelling with forty-eight to eighty-six percent slowing depending on the gene biomarker or combination. Was this not considered by the CHMP as it came out kinda late? Can this be included for consideration on reexamination?

It's a good question. So we like to emphasize our focus on each individual patient affected by Alzheimer. We see a very clear beneficial signal of cognitive and functional effects, and improvements consistent in all the measures such as CGI, quality of life, and PRQ, MMSE, among others. In all the ABC Clear populations, we consistently see clinically meaningful and significant improvements. We would like to point that out, and this is indeed a valuable dataset to put forward. Additionally, I want to highlight that we observe a reversal of the negative trajectory of quality of life in seventy percent of the patients in the trial. This means their quality of life is improved after one year compared to the start of the trial.

Okay. If the approval ultimately came from the EMA, and assuming perhaps it was conditional, is there a rule of thumb on how long you would have to conduct a conditional trial?

It's hard to speculate about this. However, we are motivated and driven by the significant unmet need for a drug with these features today. The recent pipeline failures also highlight the urgency. Between twenty and twenty-five, this year and 2030, there will be more than $300 billion in large pharma revenue at risk from loss of exclusivity, creating an estimated $90 billion growth gap, even after internal pipeline contributions. There is a huge unmet need not only for this indication but also for overall pipeline effectiveness by large pharma.

Well, that's interesting that you brought that up because I wanted to ask about how you're exploring options if you get approval for Blacaramazine to go to market with large pharma organizations and so forth.

Yes. We're focusing on expanding our corporate development partnership activities. We are presenting at an important conference in January, which allows for more meaningful discussions and is considered a hotspot for business development activities.

Okay. Well, I think it would be a real tragedy for Alzheimer's patients if this drug aren't approved because especially the ABC CLEAR data to me is so convincing. The risks are so low, and it's oral. I can't fathom that it wouldn't get approved, but that’s just my perspective. I wish I had a vote.

We would agree. Thank you for your vote as well.

Tom, are you there?

Yeah. Okay. As long as I am still on, is there a mechanism of action for collagen 241?

Yes. There is, and this will be published in a peer-reviewed paper. But in summary, I can say that collagen 24A1 is a key ingredient of the extracellular matrix (ECM). When you look at pictures of brain neurons or astrocytes, we see this very intricate network. The background is actually the supplied extracellular matrix where these neurons surround. If there’s a mutation, response to Blacaramazine is impaired. The autophagy flux, which is the recycling mechanism of neurons, is upstream from the pathologies of Alzheimer. We found patients with a wild-type gene respond extremely well. We observe effects in ADAS-COG 13 with a significant reduction. And these effects indicate that patients are declining less than prodromal patients, which is quite impactful.

Great. Okay. Well, that's it for me. I'm excited to see the ABC data examined by the CHMP as well.

I appreciate it. Thank you.

Thank you for the questions, Tom. The next question is going to come from Jesse Silvera, Spirit of the Coast Analytics.

Hey. Good morning. Can you hear me alright?

Yes. You're fine. Go ahead, Jesse.

Good morning, Clint and Doctor Missling. This is Jesse Silvera from Spirit of Coast Analytics. Thank you for taking my call. Some of these questions you've kind of addressed a little bit earlier, but hopefully you can maybe provide some additional color on some of them. Just to reiterate sort of one of your previous points. My first question is sort of an assumption, though I think you got at it earlier. But considering the CHMP review is ongoing and a final decision hasn't been rendered yet, is it safe to say that you can't discuss the reasons for the negative CHMP trending or give details on the strategy going into the re-evaluation?

That's correct.

Okay. Got that. And perhaps adjacent to that conversation, can you provide more detail on a statement found in the fourteen November press release? It stated, the company intends to request a reexamination of the CHMP opinion upon its formal adoption, including providing relevant biomarker data based on feedback and continued guidance from the CHMP, EMA, and Alzheimer's disease... I think it was Tom that was getting at this earlier, but can you comment any further on the biomarker data? I think I saw in your press release this morning that you plan to publish a paper about brain atrophy and its direct correlation to cognition. Is that accurate? And is that some of the data that you may present to the EMA?

That's accurate. So the advantage of the biomarker endpoint is objective and cannot be influenced by a patient, the caregiver, or the physician. It's a powerful measure. I pointed to oncology, where approvals have been based on tumor measurements, even when clinical effects were not significant. In Alzheimer's, we observe the brain shrinkage, and it serves as a strong objective biomarker demonstrating a drug's effect. This has clearly been shown with Blacaramazine. We believe this should gain visibility.

I think that's really interesting. I'm definitely looking forward to that. And I think kind of related is in light of the semaglutide failure. They reported that the drug improved biomarkers, amyloid, maybe tau. But you know, improved amyloid had no clinical effect on CDR sum of boxes. I'm not sure if there will be a time where regulators will no longer see amyloid equals better cognition. Moving along, in September, the company PR'd impressive AppClear three comparisons to prodromal populations and had a detailed follow-on analysis of AbClear two and AbClear three subpopulations in a GWAS preprint a little bit later. AbClear three appears to showcase an effective functional cure in early Alzheimer's patients and you covered the mechanisms of these earlier. But can you give further color on ABCLEAR one versus ABCLEAR two and ABCLEAR three? Specifically whether they were prespecified or exploratory and how regulators may or may not view these subpopulations in light of being exploratory or prespecified? Is this something you can talk about?

Yes. The definition of a b clear one essentially identifies the wild-type sigma one gene, which represents seventy percent of the population. We saw better responses in the phase two A study. We prespecified the analysis based on that gene's improvement. In ABCLEAR two, we conducted a preliminary analysis, where we identified a gene showing extremely promising efficacy, which was collagen 24A1. In this analysis, which was preplanned, we unexpectedly found it to be a strong driver of efficacy. This gene is involved in the buildup of the extracellular matrix. It's really novel science. This mechanism has been overlooked in ongoing research, and collagen gene mutations can affect response to Blacaramazine. It's also significant that the collagen wild-type made up seventy percent of our trial participants, presenting strong evidence for our treatment.

It's my understanding that Leqembi and Kisunla were both approved after a CHMP reexam, and that subpopulation data enriched their filing by conferring a more desirable safety efficacy axis. Is that true, and is this in any way relevant to Anavex's current position with some of this data, the ABC CLEAR two and ABC CLEAR three data?

It's true that both Lecanumab and Donanemab obtained approval after undergoing a similar reexamination by CHMP. They had submitted subpopulation analyses, which enhanced their filings. However, we need to note that each review is complex, and we cannot anticipate our outcome based on their precedents, as every assessment is distinct and depends on the review body.

Okay. Understood. And moving forward, will you be immediately refiling for the EMA reevaluation? To my knowledge, it took about three and a half to four months for the CHMP to give Leqembi and Kasimha their next opinions respectively, so maybe we could see something around April? Is that about what you're projecting?

That's correct. We will immediately request the reexamination as soon as possible. While there is no certainty when it comes to regulatory approval, we remain excited about the science and our data.

You know, being a small company with a unique mechanism of action, it’s probably difficult for you to garner support from the community. I recall that the European Alzheimer's disease consortium, Alzheimer's Europe, and even the US Alzheimer's Association put together persuasive arguments for the CHMP to consider during the Lecanumab re-evaluations. Does Anavex have any support like this? Are you aware of any organizations, key opinion leaders, or even patients from the trial attempting to persuade the CHMP to reconsider? Do you have that support from the community?

It's not for us to lead that effort. The community is aware of our drug, and we leave it to them to act appropriately. Our focus is to present our data, and this is a process. We are committed to this process and believe it's vital to maintain an open dialog and gain feedback to aid in this endeavor.

To conclude for me, it's pretty obvious to anyone paying attention that Blacaramazine should likely be approved for early Alzheimer's patients. The efficacy has been unprecedented in these effect sizes achieved in a small population, which should theoretically make it more difficult to do so. I think it’s a clear win for patients, caregivers, and payers. I think part of the problem the first time around may have been that it was sort of piecemeal analysis and you're introducing analysis as you're going. But now that you have all analysis at your disposal and a clear narrative, it's my hope that the company will use the reexamination to tell Blacaramazine's story and earn the approval it deserves. Thank you for taking my call, and I wish you all a good rest of day.

We appreciate the kind words, and our expert advisers also encourage us to proceed. We remain committed to doing our best. Thank you.

Thank you, ladies and gentlemen. This will conclude today's conference call. We appreciate you participating, and you may now disconnect.