Anavex Life Sciences Corp (AVXL) 2022 Q2 法說會逐字稿

Good afternoon. Welcome to the Anavex Life Sciences Fiscal 2022 Second Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. (Operator Instructions) Please 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 the 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 identifies 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 would like to turn the call over to Dr. Missling.

Thank you, Clint. We appreciate everyone joining us today's conference call to review our most recently reported financial results and to provide a business update. We are pleased with the continued advancement regarding our lead product candidate, ANAVEX 2-73 in Alzheimer's disease and Rett syndrome as we maintain our attention on execution across each of our clinical programs and overall business operations.

In the second half of 2022, we are expecting 2 pivotal top line results readouts, including top line results from the randomized, placebo-controlled Phase IIb/III study ANAVEX 2-73-AD-004 for the treatment of Alzheimer's disease, and from the randomized placebo-controlled EXCELLENCE Phase II/III study, ANAVEX 2-73-RS-003 for the treatment of pediatric patients with Rett syndrome.

Next month, Anavex will host our R&D Day for investors and analysts on Tuesday, June 21, 2022. This R&D day will include presentations from the company's leadership team with a focus on the company's clinical development pipeline. Additional details will follow closer to the event.

In July, an oral presentation of Effects of the Sigma-1 Receptor Agonist Blarcamesine, ANAVEX 2-73 in a Murine Model of Fragile X Syndrome: Neurobehavioral Phenotypes and Receptor Occupancy will be presented at the 18th NFXF International Fragile X Conference, July 14 to 17, 2022, taking place in San Diego, California.

Further pipeline expansion of the Anavex platform using gene biomarkers of response, applying precision medicine for neurological disorders with unmet medical need is expected in 2022, including meeting with the FDA to discuss the ANAVEX 2-73 Parkinson's disease program, including a pivotal Phase III study. Planned initiation of a ANAVEX 2-73 imaging-focused Parkinson's disease clinical study sponsored by the Michael J. Fox Foundation, and a planned initiation of a potentially pivotal Phase II/III study in Fragile X, the most frequent genetic cause of autism spectrum disorder, and a planned initiation of a Phase II/III clinical trial for the treatment of a new rare-disease indication. And planned initiation of ANAVEX 3-71 Phase II clinical trial for frontotemporal dementia, schizophrenia and Alzheimer's disease indications.

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 quarter.

Thank you, Christopher, and good afternoon to everyone. During the quarter ended March 31, 2022, we continue to maintain fiscally responsible cash utilization as we expand and advance our pipeline. Our cash position at March 31, 2022, was $153.3 million, which we believe is sufficient cash runway to fund our operations and our clinical programs beyond the next 4 years. Our research and development expenses for the first -- for the second quarter of fiscal 2022 were $8.6 million as compared to $6.7 million for the same quarter of fiscal 2021.

General and administrative expenses were $2.9 million compared to $2.2 million in the comparable quarter of 2021. Overall, we reported a net loss of $10.4 million for the quarter, which is $0.14 per share. The overall increase compared to the previous year period is primarily related to an increase in noncash compensation charges period-over-period, which is driven by the addition of staff to manage and support our clinical studies and development.

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

Thank you, Sandra. So we are looking forward to the next month's R&D Day event where we will present our broad Sigma-1R platform portfolio, which allows us to expand further within the neurodegenerative and rare disease space. And we remain on track to deliver data readouts as well as presentations at medical meetings and initiating biomarker-driven precision medicine clinical studies throughout the rest of the year as planned.

I would like now to turn the call back to Clint for Q&A.

(Operator Instructions) Our first call is coming from Yun Zhong at BTIG.

On the pediatric Rett syndrome study, and I see that the study has not completed patient enrollment. So I assume it's still ongoing. So I wanted to confirm if you're going to put out the press release on patient enrollment completion? And on the primary endpoint, is it reasonable to assume that it's still going to be the AUC? And have you talked to the FDA the -- I believe the last guidance or last -- yes, business guidance after the second readout from the Rett syndrome was that you were going to talk to the FDA, so has that happened yet, please?

Thank you for the call. Indeed, so the last communication is that we are planning to meet the FDA to discuss the Rett program and its procedure to move forward with filing an NDA for approval. And since we finished and completed the AVATAR study in adults, a small study despite the fact that it's a successful study, a Phase II study, which was also small and the ongoing EXCELLENCE study, which is in pediatric study, which is the largest study.

So we are waiting for this meeting to take place. It has not yet taken place, but it will take place soon and then we will learn how to move forward. And indeed, direct EXCELLENCE study with pediatric patients is still ongoing enrolling, and we might have a press release when the enrollment is completed.

So well, with regard to the primary endpoint, is it still going to be RSBQ AUC instead of RSBQ?

That's right. So when we have presented AVATAR study, we learned from the first Phase II study that the RSBQ AUC that includes the CGI-I linked respond analysis. So the RSBQ AUC includes the CGI-I respond analysis -- linked respond analysis, that is the endpoint which we will also propose for the EXCELLENCE study. That is correct. It's consistent with the AVATAR study.

Okay. So the second question is on the Parkinson's disease program. And can you remind us what you would like to achieve with the imaging study? And do you need to talk to the FDA before you initiate that imaging study?

It's a good question. So the goal is to show what we have already seen with the preclinically that the Sigma-1 is completely clearly dose-dependent target engaging the Sigma-1 receptor in the brain. And that is an additional confirmation in humans and among them also in Parkinson's patient. That's why we were able to receive the full support non-dilutive funding as a brand from the Michael Fox Foundation for this study. And we probably will very likely use that opportunity to meet also with the FDA to discuss the Parkinson's program in its totality, including the Phase III, which we said we are happy to move forward with given the successful Phase II PDD study.

We look forward to the R&D day in June.

Thank you very much.

The next call is from Pete Stavropoulos from Cantor.

So I don't know if I missed it in the previous question, but I know that you haven't spoken to the agency recently. But from previous discussions, do you have a sense of whether or not you're going to need to wait for the pediatric data to file for the adult indication?

So the pediatric data is a larger study. And in theory, if you would file for adults, you would not need it because it's a different age group. But what we believe is probably a prudent assumption is to include the pediatric study in its totality for the Rett program. But as we stated, we don't know that yet until we meet the FDA for guidance on how to move forward in terms of regulatory filing for approval of ANAVEX 2-73 for Rett syndrome.

All right. So I also wanted to ask about your thoughts regarding sort of the lessons, the takeaways from the Rett syndrome experience with 2-73 and their applicability to potentially clinical development initiatives with the compound, say, in Fragile X. And if you could give us a sense of when you anticipate the Fragile X program to initiate patient enrollment?

Right. So we are very excited about the Fragile X program for 2 reasons. First of all, we have very solid and it is a very strong evident animal model in Fragile X, which was published last year. And there's new data coming out among them, it will be presented also at the conference in July, which we pointed out.

And there will be additional biomarker information, making very clear of pathology -- biomarker pathology making clear that the drug really improves the phenotype of this disease, which is the largest autism spectrum disorder. And why it's exciting for a second reason is because this largest autism spectrum disorder is like Rett syndrome and the autism spectrum disorder.

And we measured the ADAMS score, which is a key measure of anxiety, which is a known feature of -- or limitation and problem for these patients with autism, and we were very successful in both Rett studies in the Phase II and in the Phase III AVATAR to the successful improvement with the drug on this endpoint of the ADAMS score. And that is why we're very excited both from the preclinical data as well as from the clinical data side of point of view.

So what we are now doing, we want to make sure that the protocol is very robust because the challenge of Fragile X, it's a very diverse patient profile. So there are very different features of the disease, which is not similar. And we want to make sure we are using a population, a trial population, which is as homogeneous as possible.

So in order to avoid a trial failure because not the drug doesn't work, but because the patients are so different and the endpoints you selected for these patients don't apply to all. And it is a key what we're now in the process of figuring out, then we will meet with the agency and confirm that approach and also make sure that we can run this as a pivotal study. So we expect this to take place in the second half of this year.

Okay. And then at the same time, will you be also consulting with the EMA or that will be at a later time point?

That's right. Since we will include most likely also pediatric patients, we will also include the discussion with EMA, which is important because they want to be also have a discussion before that trial starts.

And just one last question on the Alzheimer's program. Can you provide any type of color on the rollover rate from the Phase IIb/III into the open-label extension?

Yes. So the last I heard was there was over 90% rollover from patients who finished the placebo-controlled study in the open-label extension. So that's a very positive sign. And we're very excited because we're getting really close to finishing the study with the last patient out, and then we can start the process of data cleanup as well as then locking the database and then subsequent releasing the data. And we're very excited about this.

The next question is I'm guessing from Soumit Roy at Jones Research.

Yes, this is Soumit here. Congrats on all the progress. A question on the Alzheimer front. Could you give us a little finer detail on when should we think the data to come out? Is it still in the third quarter or fourth quarter?

It's a good question. So since we said second half, I'd like to stick to that because we don't know exactly how long the data cleanup takes. And if it takes -- it's quicker done, performed, than it might be in the Q3, and if it takes longer, then it will be just slipping into Q4. So it's best really to call it second half of 2022. But when we have more clarity, we'll provide a closer update.

I have one question from Muz Saleem from H.C. Wainwright. And he said, what are the key points of the agenda for your upcoming meeting with the FDA with the Parkinson's disease program pivotal study. For example, would the biomarker endpoint be pushed up in priority owing to your recent success with SIGMAR1 mRNA expression data in Phase II?

This will be all on the agenda. And since we are sharing this data very timely now, and we want to also make sure we are able to include the extension data of the Parkinson's study. And since this is now completed, and once we have that, we will be able to have a bigger picture of the Parkinson program and the items you just referred to will be all discussed.

Okay. A second question from Muz is, can you give us a preview of the new indication that you're excited about in the near degenerative and rare disease space that you'll be showcasing in your upcoming R&D Day event.

Right. So we will have the ability to choose between several rare disease indications, and that's why we have kept like that. And it really shows the worth and the value of the platform we have, and it's backed by preclinical data on different indications. And so we want to make sure we are doing the -- or prioritizing the right rare disease if we are comfortable with the clinical design to show efficacy.

And that's really what we're working on. So therefore, we didn't mention what indication it is, but there are different indications, separate indications, independent indications, which could become the indication which we will release once the trial starts. And it's only because we have the ability to showcase several rare disease indications being demonstrated positively impacted by the drug ANAVEX 2-73 in respective clinical animal models.

Muz, I see you're in the chat now. You can go ahead and ask your own questions.

Yes, I'll save you some trouble. So in terms of your upcoming 2-73 image focused Parkinson's study, we were wondering if you collected imaging data from the Phase II trial? And if you did, could this methodology from your current study be used to combine the data?

If I may ask, combining the data with what exactly?

If you may have collected imaging data in the Phase II trial or you did not collect any imaging?

Yes, we did not. In the Phase II Parkinson's disease dementia study, yes, there were no imaging study collected. And that's why this imaging study separately is now taking care of that.

Okay. Okay. Understood. And in terms of 3-71 for AD, Will you use the same cohort characteristics? Or do you think this drug could potentially differentiate from 2-73 and be more efficacious in some subpopulations of AD patients?

That's an excellent question. So we're expecting that there will be some additional data on 3-71 preclinically also to give us guidance on this to fine-tune the indication. But right now, without any further knowledge on this, it could be the best choice for going into patients with AD which are -- have the best, I would say, cohort consistency and homogeneity to and also have the availability to make the trial as robust and as quick as possible in its enrollment. So this will be more likely the early Alzheimer's disease patients, similar to what the Phase III of the ANAVEX 2-73 study is right now.

Okay, understood. And just finally on 3-71. We're looking forward to this one. Could you expound briefly on the strategy for 3 indications for this program? So clearly, FTD appears to be a frontrunner here. How confident are you in the schizophrenia indication given the Sigma-1 receptor activation has been associated with off-target effects and psychosis?

Yes. So we actually are very excited because 3-71 is a reminder to everyone is not only a SIGMAR1 agonist, but also an M1 agonist, and there are trials out now, which has been shown as very successful in this indication of schizophrenia with pure M1 agonists.

And if you now look at what we heard from the inventor of ANAVEX 3-71, who always told us that he looked at M1 agonist as a target and he found by accident, so to speak, ANAVEX 3-71 being more potent than all the other previous drugs he had developed as M1 agonist. And when he looked at the profile of this 3-71 molecule, he saw that there was not only M1 agonism but also SIGMAR1 activity. So he postulates ANAVEX 3-71 in schizophrenia would be even more proactive and successful possibly because of the SIGMAR1 activity. And so that's why we're excited about the 3-71 in schizophrenia as well.

Yun, it looks like maybe you had a follow-up question.

So it looks like you have a lot of milestones planned for the second half of this year. And so I wonder -- I'm not questioning the capacity to be able to complete all the milestones, it seems a lot of activities. But if you have to talk about the priority, which one do you think could be the most important one that you think for the pipeline development?

I think it's really consistent with the bullet points you have seen today. So it's really finishing the Alzheimer's study, which is in autopilot. So we just have to do the cleanup work, if you so like. And the same is finish the Rett study. But then following with the priority, I think it would go into Fragile X study, given that's a relatively short study and can be pivotal potentially and it's a huge unmet need and it's 7x the size of Rett syndrome in terms of indication number of patients, but then also following up with a Parkinson's disease pivotal study.

And also, I would not rule out frontotemporal dementia and also schizophrenia, especially schizophrenia for 3-71. When I say frontotemporal dementia, I mean, for 3-71 because schizophrenia is a relatively short study, and that obviously would be important to that. But also, I don't want to forget to mention the rare disease, which we have not yet given the name for the indication and to do a pivotal study in that indication. So really consistent with the bullet points you have seen.

It looks like we may have a follow-up question from Pete as well. No, maybe not. So Christopher, I think with that, I have no further questions at this time, so you can continue.

Thank you very much. So again, to reiterate, we are looking forward into the remainder of 2022. And we're very excited about the company's potential platform, especially as we build on successful completion of 2 important biomarker-driven precision medicine pivotal studies, and we're looking forward to this pivotal clinical readouts in Alzheimer's disease in pediatric syndrome. But also, we are very excited to move forward with the planned studies, which we really want to initiate because of its unmet need, and we're very excited about this. So look forward to updates and reach out to us for questions.

Ladies and gentlemen, that concludes the call today. Thank you for participating, and you may now disconnect.