Anavex Life Sciences Corp (AVXL) 2018 Q1 法說會逐字稿

Good afternoon, my name is Darrel, and I will be your conference call operator today. Welcome to the Anavex Life Sciences Fiscal 2018 First Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Clayton Robertson of The Trout Group. Please go ahead.

Thank you, and good afternoon, everyone. We appreciate you joining us today for Anavex Life Sciences conference call and webcast. Our agenda is to review the company's financial results for first quarter fiscal 2018, and to highlight some key corporate developments. A taped replay of this call will be available approximately 2 hours after the call's conclusion and will remain available for 2 weeks. The call will also 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. Dr. Missling and Ms. Boenisch will make remarks and then we'll take questions from equity analysts.

Before we begin, please note that during the course of this conference call, the company will make some projections and forward-looking statements regarding future events. We encourage you to view 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 to the development and/or commercialization of potential products, uncertain 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, Clayton. I'd like to thank everyone for joining us on today's conference call to review our first quarter financial results and clinical progress.

I'd like to discuss our most recent quarter and share with you our new clinical product strategy for ANAVEX2-73.

Let me cover latter first. It was a very important strategic decision to start the new clinical trials after genetic data were collected and analyzed. We believe Anavex can be a pioneer with the inclusion of advanced genomic biomarkers into late-stage CNS precision medicine trials, including our Rett syndrome, Alzheimer's disease and Parkinson's disease trials. Using genomic biomarker-driven clinical trials and therapies are bringing great success to patients in the oncology space. We believe the CNS space is ready for this precision medicine approach. The result should allow to more precisely target patients based on specific genomic profiles that may be highly responsive to ANAVEX2-73. And hence could significantly increase probability of success in clinical trials. That is in cancer treatments involving genomic biomarkers are very good examples of the significant success, which could be accomplished with this approach.

We have just completed both RNA and whole exome DNA genome sequencing from ANAVEX2-73 treated patients, utilizing Illumina HiSeq 2500 Next Generation Sequencing technology. The analysis of this data has characterized several genomic alterations in well-characterized targets that have the potential to be used as biomarkers, which we plan to use to identify optimal patients in forthcoming clinical trials. This novel, precision-medicine approach will enable enriched clinical trial populations, more robust regulatory submissions and better characterized clinical trials designs. Full details of the genomic sequencing analysis have been submitted for presentation at a upcoming scientific meeting.

In consideration of the new genomic results, the investigational new drug application, IND filing for ANAVEX2-73 for the treatment of Rett syndrome will be updated and submitted during the current quarter to include this data. The FDA previously granted ANAVEX2-73 orphan drug designation for the treatment of Rett syndrome. Start-up activities with clinical trial sites are underway to be prepared to dose the first patient following FDA approval of the updated IND.

Additionally, with the availability of this new genome sequencing information, the company plans to submit an IND to the FDA within the first half of this year for the planned Alzheimer's Phase II/III study. The randomized, double-blind, placebo-controlled study will evaluate the safety, tolerability and efficacy of ANAVEX2-73 in Alzheimer's disease patients and will be conducted in both Australia and North America. The company is planning to use a similar process and trial design for the Parkinson's disease Phase II study, for which the clinical site validation is completed.

What is also relevant is that these new findings could be applicable to additional indications where we have seen response with ANAVEX2-73 like Fragile X, Angelman syndrome, infantile spasm and multiple sclerosis, MS. Currently, we have enough cash for 2 years and are therefore able to execute on our planned clinical trials in these 3 indications in 2018.

On that note, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a brief financial update.

Thank you, Christopher. Good afternoon.

Our cash resources at December 31, 2017, were $28 million. We believe this is adequate cash to fund our developmental and operational objectives for 2 years. During the first quarter, the company used $3.6 million in cash to fund operations. Operating expenses for the quarter were $4.1 million, which included $1.1 million in noncash charges. This was compared to $3.2 million for the comparative quarter in fiscal year 2017, which was inclusive of $0.9 million in noncash charges. The increase in operating expenses is primarily attributable to an increase in research and development activities of approximately $0.7 million to $2.7 million due to an increase in expenses incurred in preparation of further clinical trials scheduled to commence during fiscal 2018.

The net loss for the first quarter was $4.1 million or $0.09 per share, compared to a net loss of $3.1 million or $0.08 per share for the fiscal 2017 first quarter.

With that, I'll turn the call back over to Christopher.

Thank you, Sandra. So in summary, we continue to maintain a strong financial position, which will allow us to carry out planned clinical studies for ANAVEX2-73. We anticipate our efforts will result in several significant key milestones and accomplishments in 2018 with the advancement of 3 clinical trials and the anticipation of a number of data readouts late in 2018. We look forward to updating you as advancements are made.

I would now like to open the call for questions. Operator, please go ahead.

(Operator Instructions) And we have a question from Caroline Palomeque from NOBLE Life Science.

So I just have a couple of questions. So my first question is about the Illumina genomic sequencing. Is this being done in addition to the Ariana's KEM data analytics that you had presented in the slide deck from the fall? So is this a new set of analytics? Or is this a part of that same method?

So the answer to that question is, the sequence is done independently by a third party and the analysis of this is then included in the KEM analysis tool of Ariana, so the overall outcome is the prior analysis done of consideration response, which we presented last year at CTAD. And now, including this genetic information will be together analyzed. So that is the overall precision medicine approach, which is being called precision medicine.

Okay. Great. And then just wonder if you could give any guidance on what you expect the cost of some of the trials will be. I'm just not sure if that was guided to before? Just all the programs in Phase II?

The cost of the programs have not been explicitly disclosed. However, we have a grant from the Rett Foundation for the Rett syndrome trial and that is running, right now, at least $600,000, and with that, we believe we'd cover a big portion if not the majority of the trial cost. It's not also a very long trial. It's a very concentrated trial. The other 2 trials are a little bit more expensive but on the total, the current cash position, which we have, is more than comfortable to cover all these trials. We also have additional grants for the Alzheimer's study from the Australian government. We received always a significant proportion of support -- cash support from the Australian government when doing studies in Australia and expect exactly the same also to take place in this case for the Phase II/III study in Alzheimer's disease.

I can jump back in the queue, I did have like 1 or 2 more questions. Okay, I'll ask one quick question. So on the Rett program, I was just wondering if -- and again I'm not sure if you've given guidance on this, but just on cost per patient that you expect including all cycles of treatment for -- like a yearly cost per patient in the Rett program, just wondering what the ballpark number might be for that?

Are you referring to the cost per patient of patients, which are with this disease? Or is it related to the trial per patient cost.

No, no, no. Yes, I'll be clear. With the patient -- if the [guard] were to make it to market, what would be the cost per patient for the patient -- to treat the patient?

You mean the price per patient for the treatment? For treating ANAVEX2-73?

Yes.

I think this will be a question of the drug product profile. So basically, how good is the drug doing and improving the life of the patients. If it's very impactful to have a significant impact on the quality of life of the patients, which as you know, there is a very low bar right now because these patients have no approved treatments, they have no chance of improving because there is no available treatment for Rett syndrome available today. So the bar is relatively low. The question is now what price you can demand. It's an orphan designation, it's a rare disease. There are data out there, which gives you a range of expectation what the price could be, but we have made, obviously, an internal assessment that we want to confirm that once we have a better sense about the feature of the drug in the patients.

And our next question comes from Robert Laborde from Roth Capital.

(inaudible) The genetic data that you mentioned sounds really interesting. Is there any way that you could elaborate on what you're finding or is there any subpopulations in Alzheimer's disease? Whether it's mild-to-moderate or moderate-to-severe or any particular markers or coincident symptoms that might narrow down the population or isolate any kind of patient groups that would be the better responders?

Yes. All of these things we are -- we have found something and we have submitted the analysis, the outcome of this to a very -- the most reputable scientific meeting this year. And before that, we obviously, are bind by the requirement to be silent on that until that will be disclosed exclusively at this conference.

Okay. Then it builds the anticipation a little. In terms of starting the trial, is there any particular target date to get patients [treatment]?

We want to start as soon as reasonably possible and we don't need to wait until we disclose the data of the genomic outcome. So we'll try to submit the IND sooner than later and we said publicly today that we'd do it within the 2018 first half of the year.

And our next question comes from Jason Kolbert from Maxim Group.

It's Jason McCarthy for Jason Kolbert. I have a kind of a broad scientific question related to your deep sequencing work, can you just discuss in a little bit more detail, the use of deep sequencing and looking for a genomic alteration. In terms of cognitive decline or rates of cognitive decline -- because if there are specific targets in biomarkers, I'd imagine that there is variability even within the same gene in a 2 different patients. So can you just discuss a little bit of how you can interpret some of the data in terms of different rates of cognitive decline and how could that impact the upcoming trial?

So the goal of the exercise is to increase the homogeneity of the study population and avoid the noise, which is caused by heterogeneity of a study population. So the goal is to find patients, which are responding to the drug and if they have the concentration of the drug in the right amount and to avoid patients who are not responding to the drug despite having the right concentration, and that is what we try to accomplish with that. So this could be done -- this could be the outcome of that could be either a positive marker or a negative marker. So if it's a positive marker, then we would enrich with that biomarker, if it was a negative marker, the patients with that mutation are declining more than usual or declining without impact on the drug, then we would exclude those patients in the study. So you will find the answer in the scientific upcoming meeting.

And we have no more questions at this time.

So thank you all for participating in today's conference call. I hope you are as excited as we are about the great progress and the prospect for the remainder of 2018. Should you need additional information or have any questions, please visit our website at www.anavex.com or call or e-mail us. This concludes our remarks today. Operator?

Thank you, ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.