Anavex Life Sciences Corp (AVXL) 2021 Q4 法說會逐字稿

Welcome to the Anavex Life Sciences Fiscal 2021 Fourth Quarter Conference Call. My name is Adrianne, and I'll be your operator for today's call. (Operator Instructions)

Please note, this conference call is being recorded.

I'll now turn the call over to your host, Clint Tomlinson. Clint, sir, you may begin.

Thank you, and good afternoon, everyone. We appreciate you joining us today for Anavex Life Sciences' Fourth Quarter Conference Call to review financial results and discuss the company's business updates. A taped replay of this call will be available after the call, and 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.

Following management's remarks, there will be a question-and-answer session. Before we begin, please note this -- 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, 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. We really appreciate everyone joining us on today's conference call to review our most recently reported financial results and to provide a business update. We concluded an exceptional fiscal year 2021 while continuing our momentum, highlighted by the efficient execution and full enrollment of 3 precision medicine clinical trials, including the Phase IIb/III ANAVEX 2-73 clinical trial in Alzheimer's disease, the AVATAR 2-73 clinical trial in Rett syndrome as well as the Phase I study of ANAVEX 3-71.

Starting with our lead drug candidate 2-73. We expect topline results from the second placebo-controlled AVATAR study for the treatment of our patients with Rett syndrome, which are expected to be announced around calendar year end 2021. This study took place in Australia and the United Kingdom using a higher dose than the U.S.-based Phase II study and enrolled 33 patients over a 7-week treatment period, including ANAVEX 2-73-specific precision medicine biomarkers.

Topline results from the placebo-controlled EXCELLENCE Phase II/III study for the treatment of pediatric patients with Rett syndrome are expected in the first half of 2022. This Phase II/III study in pediatric patients with Rett syndrome age 5 to 18 will evaluate the safety and efficacy of 2-73 in approximately 84 patients over a 12-week treatment period, including 2-73-specific precision medicine biomarkers.

Regarding our Alzheimer disease program, topline results from the placebo-controlled Phase IIb/III ANAVEX 2-73-AD-004 study for the treatment of Alzheimer's disease are confirmed and are expected in the second half of 2022. The double-blind, placebo-controlled 509 patient late-stage Phase IIb/III study in patients with Alzheimer's disease exceeded enrollment of the targeted patient number of -- at 52 sites across North America, Europe and Australia. Using ADAS-Cog for cognition and ADCS-ADL for activities of daily living and function as primary endpoints.

This multicenter double-blind clinical trial is measuring efficacy, tolerability and safety of 2 different once-daily oral 2-73 doses or placebo.

As reported last month, the independent data safety monitoring board for the company's Phase IIb/III study completed its most recent pre-planned review of the preliminary Phase IIb/III study in Alzheimer's patients. As specified in the protocol, the DSMB reviewed the interim safety data for the 2-73 Phase IIb/III Alzheimer's disease clinical study and it's open-label extension ATTENTION-AD study. Upon review of the interim safety data, the DSMB recommended to continue the study without modification.

And we're very excited also to report that the topline data from another pipeline compound, ANAVEX 3-71, which had received orphan drug designation by the FDA for frontotemporal dementia, a placebo-controlled Phase I study in ANAVEX 3-71, evaluating an ANAVEX 3-71 in humans are expected around calendar year end 2021. During 2022, we were also moving closer to further expanding the pipeline for 2-73, using gene biomarkers of response, applying precision medicine for another neurological disorder with unmet medical need including a planned initiation of 2-73 imaging-focused Parkinson's disease clinical study.

A plant in its initiation also of our Phase II/III clinical trial for the treatment of a new rare disease indication. And lastly, our planned initiation of a pivotal Phase II/III study in Fragile X syndrome, the most frequent genetic cause of autism spectrum disorder.

In Fragile X, we recently announced, in August of this year, strong preclinical data of 2-73 in Fragile X syndrome published in the peer review journal scientific report. The study evaluated 2-73 in Fmr1knockout mice, a validated animal model for the disease, which resulted in the reversal of high activity and restoration of associated learning. Furthermore, 2-73 demonstrate dose-dependent sigma-1 receptor occupancy in a positron emission tomography PET study.

And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a brief financial summary of the recently reported year-end.

Thank you, Christopher. And good afternoon to everybody. We continue to maintain a strong balance sheet and fiscal responsibility. Our cash position on September 30, 2021, was $152.1 million, which we believe is sufficient cash runway to fund operations and clinical programs beyond 2025. During fiscal 2021, cash utilization in operations was $30.4 million. We reported a net loss of $37.9 million for the full fiscal year, which is $0.54 per share as compared to $26.3 million or $0.45 per share in the comparable year 2020.

Research and development expenses for the year were $33 million compared to $25.2 million for the comparable fiscal year. The increase is primarily attributable to the continued advancement of our ongoing clinical trials. Most notably the full enrollment of our international Phase IIb/III Alzheimer's disease trial and the related open-label extension and the continued enrollment and advancement of the Rett syndrome studies and expansion of these trials internationally.

General and administrative expenses were $9 million for the year as compared to $5.9 million in the prior year. The increase is mostly significantly associated with an increase in personnel and associated noncash stock option compensation charges.

Thank you. And now I'll return the call back over to you, Christopher.

Thank you, Sandra. And as we look to the remainder of 2021 and into 2022, I'm very excited about the company's potential as we continue to advance and expand our Precision Medicine clinical programs. As we look ahead, we will continue to focus on driving meaningful growth across our broad sigma-1 platform portfolio to deliver transformational treatments for patients with both degenerative and developmental neurological disorders around the world. So we look forward to providing further updates in advance and continue.

And at this point, I'd like to also wish everyone a happy Thanksgiving. I would like now to open the call for questions. Operator, please go ahead.

(Operator Instructions)

And our first question comes from Chaz Duncan from Cantor Fitzgerald.

This is Pete Stavropoulos on for Charles. Congratulations on the progress and appreciate all the updates. I have a couple of questions regarding Rett syndrome. When you think about the efficacy measures that were made and the efficacy seen in the U.S. adult study, how do you feel about the sample size or the planned effect size out of AVATAR and also the EXCELLENCE study? And we saw that you upsized the sample size for EXCELLENCE from 69 to 84 subjects. What drove that decision? If you can give us some color on that?

So the efficacy effect size was really significant in the first U.S. study, which was using a low dose, as you remember, and the effect size was in the range 1.3 to -- 1 to 1.3 Cohen’s d, which is considered very large. And since we expect those responses based on the higher doses, we basically are inclined to believe that the second study, the AVATAR study might show a similar, if not higher effect size, given that we are using a high dose in the AVATAR study compared to the U.S. study.

The extension of patient number in the EXCELLENCE study from originally 69 to 84 was based on a request, a regulatory request to also have an additional sub-analysis of the number patients -- of the patients in different age groups for example, from 5 to 18 to also have an additional analysis of patients from 5 to 12 and then from 12 or 13 to 18. In order to make sure we have a powerful model, we put this additional calculation, we thought it is prudent to just add additional number of patients would ended up to the total number of 84 as we communicated.

Very helpful. We also saw that you made a few changes to the primary and secondary endpoints in the EXCELLENCE study. Can you give us a -- help us understand what drove those decisions? Was it a result of advice or interactions with the FDA or any other regulatory agency?

Right. So we have noticed that the RSBQ is really the most -- more rigorous endpoint. It is really going through 45 very dedicated questions and detailed questions, which can be answered very precisely. There's also the ability, which we have seen and we have demonstrated that in our presentation of doing sub-analysis of the sub-scores of the entire score of the RSBQ score. However, when we looked at the CGI-I, we noticed that there was a weaker ability to make this because it's really a global assessment. And it also has a very known and it's published weak, I would say, reliability. But we basically are including that still, but we didn't want to overemphasize that score. So that was the background for the focus on the RSBQ.

And my last question with regards to the Parkinson's disease dementia program. Can you provide any updates on that program? Have you met with the agency to discuss it? And -- or do you plan to any time in the near future?

We plan -- right. Thank you very much. Yes, we plan to do that. We actually are in the process of now discussing the data with the foundation, and we are expecting to get a valuable feedback or input on the design of pivotal studies for Parkinson, and also pivotal study for Parkinson dementia. And with that, in our package, if you so like, we then feel more robustly educated and fully informed to go to do the discussion with the agency about a proper pivotal study and the respective communications.

Do you think by some chance, are you going to wait for the imaging study results or it will -- the meeting will occur beforehand?

This will be before the imaging study, but definitely, we are still including which we have not yet reported, the total gene analysis of the PDD study. So that means we do not only look at the sigma-1 gene expression changes of the mRNA, but also the gene expression of all genes of all participants that is in the active arm as well as in the placebo arm and we will leave this additional intelligence can be drawn on that to make an informed design of a study, which increases further the charges of our pivotal study down the road.

And the next question comes from Ram Selvaraju from H.C. Wainwright.

This is Mason for Ram. Congrats on the progress. So firstly, how early in 2022 do you envisage filing an NDA for blarcamesine in Rett syndrome, providing you positive readouts from the 3 trials?

It's really -- I would let the data first come out, and then we can talk about that. But obviously, pending data, as soon as possible.

Excellent. And then with regards to 2-73, what learnings are you transitioning into your Fragile X syndrome development. For example, are you planning on cross analyzing data from the Rett syndrome and the Fragile X syndrome trials, given that the 2 syndromes sort of share overlapping symptoms as well as underlying cellular mechanisms?

That's right. There are 2 pockets here to look at. One is the preclinical pocket, and we see a very strong response in the animal model of Fragile X and it leading to even the reversal of the pathology. And then we look also at the clinical study of the Rett syndrome, and we see that the phenotypes are overlapping between these 2 indications. And there are some endpoints, which are included in the Rett syndrome study.

For example, ADAMs is one of them, and that had been responding very well with the drug. And we believe this could be also used as a key measure for the rectum for the Fragile X study since that has been also even used prior in Fragile X study as a primary endpoint. The decision has not yet made exactly about how to use that endpoint, but this could be one potential value.

Okay. Very helpful. And we read with interest your recent published paper and expert opinion on therapeutic targets where you described 2-73 and 3-71 as hand-in-hand targets for Alzheimer's disease. We were wondering if you've, #1, benchmark these drugs together preclinically? And #2, test the combination? If not, do you plan to do so?

So the 2 compounds came from different angles and different labs, but they are now moving more into what we call -- we try to learn as we go. But so far, we could not find a comparable assay other than a very early preclinical assay of target engagement. And there are differences in the affinity to the sigma-1 receptor and also difference with the muscarinic receptor, which we believe is also important. And ultimately, we will be only able to see really the difference of the two, if we run really both drugs in the same indication in the same trial. So we think that each drug has its own merits, and it could very well be that 3-71 is really good at focusing more on frontotemporal dementia, which we have offer designation for and could also be very good at Alzheimer. But right now, we have 2-73 more advanced. So we will eventually find out.

And then just finally, you've talked about 2-73 using in a prophylactic manner. We saw a recent science advances article, which describes unique kind of brain proteomic signature in younger cohorts, I mean age of 39. Are you currently working on or planning a genetic or protein test in a younger cohort to kind of help your 2-73 administration in the future?

Yes. We looked into that, and it's a very good point because while the disease is showing up correlating with age, it's clear that an early intervention is really most likely the most efficient way to incubate or maculate this disease. And since our preclinical data indicates that potential, which was done very successfully in animals that who got the drug before they got injected with a toxic a better load, and they never developed the symptoms of Alzheimer's disease. So there's really high likelihood that we should or encouragement to also proceed. And we said and we're committed to eventually do that with the appropriate -- in an appropriate time down the road. So we've committed to look into that what you described early on.

And the next question comes from Soumit Roy from JonesTrading.

Could you give us a little color around the upcoming adult Rett study. So as I understand, there will be different dose cohorts. So is -- could you give us an idea of the size? And is there going to be intra-cohort dose escalation? What should we expect?

Yes. So let me explain it, there is not a different dose. It's just target doses higher than the U.S. study. So there's only 1 dose and 1 placebo arm. And that 1 dose will be a target dose. So that is just higher than the U.S. study. So there will be not multiple doses technically, it's just 1 higher dose.

Okay. Got it. And you're not disclosing if it's going to be 10, 20 or 30?

Right. We will find out when we disclose the data and we will be able to learn about that.

Got it. And the -- any color on the Alzheimer trial, what are you planning as patients are coming out of the 48 weeks? Are they going to go into maintenance trial? Or what is the plan there?

Right. So we have an extension study called ATTENTION-AD, which is a 2-year study of following up as a open label after the 48 week, which has started, after the first patient finished the 48 weeks. And because these patients have actually -- some of them finished this Phase II open-label extension, they had requested to continue to stay on the study drug. And so what we did, we initiated and were successful in expanding now this ATTENTION-AD study, open-label extension from 2 years to actually 3 years.

So patients who are finishing the study, the placebo-controlled study and into the extension study finished the 2 years will now continue to go into the third year. And that is because of request by the patients, the caretakers and the physicians. And also, I'd like to add that the -- I'd like to add also that the conversion from the placebo-controlled part of the study to the open label is very high. It's above 94% currently, which is a good sign.

Great. And one last question on the -- back to the Rett program. Where are you with FDA on the conversation turning whether these are going to be the registration trial data?

It's really a question of the data and the data has to speak for itself. And we also said it's a potential fill study. So that really weighs in, and the data really will determine this how this will be looked at. We have to point out that for adults, there is no treatment available. And the patient population is also harder to bring into the trial because they're more advanced.

They also are -- because of the disease early passing on. They're not that many patients available to find in a trial. So the focus is really on the traffic study for that reason. But still, there is an unmet need for patients of all ages for Rett syndrome.

So we could expect you could even start rolling submission with the adult trial. And if need be, that could be approved first before the pediatric really gets filed?

I would say it cannot be excluded, and -- but I cannot promise it either. So that's why I said we would have with AVATAR study in the U.S. Actually 2 independent placebo-controlled study in a rare disease, which usually is beyond the request for rare diseases usually. So this would be, if successful, a very powerful package.

And our next question comes from Yun Zhong from BTIG.

So the first one is on Rett syndrome. And so the definition of a responder, is that -- on each efficacy endpoint, is that going to be the same in pediatric patients as compared to in adult patient? And also, the definition of a responder, is that consistent with how clinicians are viewing as a clinically meaningful improvement?

That's correct. It's consistent with the first study and it's consistent with the assessment of the physician. That's correct.

Okay. Then I think I didn't see an update on the 3-71 program in 2020 -- sorry, 2022 in terms of upcoming milestones. So I just wanted to check if frontotemporal dementia is still going to be the first indication for that program? And when do you expect a study potentially to start?

Right. So we have mentioned that we would move ahead with frontotemporal dementia, but we like to have really the solid Phase I data in hand before we say we commit to this. And -- but we definitely will move forward with FTD or any other related dementia indication?

Okay. And then on the pipeline, I think well, it's very encouraging to be able to target multiple indications. But just wonder, which indications do you think you would like to prioritize going forward? Of course, the Rett syndrome and -- is going to be the lead indication. But which indication do you think might be suited for partnerships?

So we believe that we have, with the rare disease franchise which is Rett syndrome, Fragile X and others, the ability and it's not been the first time that our company has built this into a commercial entity with rare disease, targeting rare diseases. So that seems to be very doable. If it comes to the indication like Alzheimer's disease and Parkinson's disease, which requires also the involvement of a detailing general practitioners, physicians of -- general physicians, then it might be more powerful to penetrate the market with the support of a large pharma partner.

And at the right time to make sure that we retain most upside for Anavex and for our shareholders, this will be done at the right time and not prematurely to give up too much of the upside. But it is no doubt that these large indications require additional support.

And your next question comes from Paul Nouri from Noble Equity.

My questions were on the Parkinson's programs and they're already answered.

Thank you.

And that concludes the question-and-answer portion, and that also concludes the conference call. Thank you for participating. You may now disconnect.