Q3 2023 Anavex Life Sciences Corp Earnings Call

Participants

Christopher U. Missling; Chairman, President, CEO & Secretary; Anavex Life Sciences Corp.

Clint Tomlinson; VP of Corporate; Anavex Life Sciences Corp.

Sandra Boenisch; Principal Financial Officer & Treasurer; Anavex Life Sciences Corp.

Soumit Roy; Director & Healthcare Analyst; JonesTrading Institutional Services, LLC, Research Division

Presentation

Clint Tomlinson

Good morning, and welcome to the Anavex Life Sciences Fiscal 2023 Third Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call.
(Operator Instructions) Please note 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 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 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 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.

Christopher U. 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.
We are very excited to be entering an important phase of the company with several key data readouts within the remainder of 2023 for blarcamesine.
First on Rett syndrome. In June, we announced the completion of the placebo-controlled EXCELLENCE Phase II/III clinical trial, RS-003, in pediatric patients with Rett syndrome and we're looking forward to the top line data of this potentially pivotal clinical trial in the second half of 2023.
On June 12, we announced the publication of a new peer-reviewed study in the American Journal on Intellectual and Developmental Disabilities with relevance to this clinical trial entitled, Rett Syndrome Behavior Questionnaire in Children and Adults with Rett Syndrome: Psychometric Characterization and Revised Factor Structure.
In the EXCELLENCE clinical trial, they have characterized Rett Syndrome Behavior Questionnaire, RSBQ, together with the Clinical Global Impression Improvement Scale, CGI-I, represents the co-primary efficacy endpoints of the trial. This psychometric study is timely and significant as it provides additional support for the use of the RSBQ in children and adults as well as reference values and revised subscales for its improved use.
We have also been further encouraged for the results of this upcoming data readout based on recent long-term clinical trial results from the U.S. ANAVEX-2-73-RS-001 clinical trial, which we announced end of June. The long-term data demonstrated disease-modifying effect of blarcamesine for adult patients with Rett syndrome.
Results from phamarcometric modeling of the full clinical data from baseline of the double-blind study to the end of the open-label extension study indicated that the data are best characterized with a combined symptomatic and disease-modifying drug effect model, meaning that blarcamesine exhibited both symptomatic and disease-modifying effects in the treatment of Rett syndrome in a clinical setting.
Continued improvement from the drug as measured with the RBSQ total score was observed from the start of the double-blind study to the end of the open-label extension for patients continuing on blarcamesine.
Additionally, disease progression, which is defined as the change in Rett syndrome disease severity with time was also reduced with long-term treatment with blarcamesine.
In Alzheimer's disease, we look forward to presenting, including in a scientific journal once available, the complete data set of the recently completed Phase II/III Alzheimer's disease trial of blarcamesine. With newly available preliminary efficacy results of surrogate biomarkers, we intend to initiate discussions with regulatory agencies in the context of the ongoing clinical development of blarcamesine in this indication with a goal of providing a much-needed treatment for the millions of patients living with Alzheimer's disease in a convenient, once-daily oral treatment. We expect to be able to announce this data also within the second half of 2023.
Following on the encouraging results of our Parkinson's dementia clinical trial, including the results of the 48-week open-label extension of this trial, which we announced at the end of March, we tend to use the same endpoints in a forthcoming pivotal study of blarcamesine in Parkinson's disease, which is currently in the planning stages and we look forward to announcing the significant milestones of this clinical trial initiation as they are executed.
Further, the pipeline expansions of the Anavex platform using gene biomarkers of response applying precision medicine for neurological disorders is expected, including a planned initiation of blarcamesine imaging-focused Parkinson's disease clinical trial sponsored by the Michael Fox Foundation, a planned initiation of a potential pivotal blarcamesine Phase II/III clinical trial in Fragile X syndrome and a planned initiation of our Phase II clinical trial in ANAVEX 3-71 in schizophrenia. We also are planning an initiation of our potential pivotal blarcamesine trial Phase II/III for the treatment of a new rare disease indication, which we'll announce accordingly.
And we'll continue to expect clinical publications involving ANAVEX 2-73 blarcamesine and ANAVEX 3-71.
In conjunction with these planned clinical developments, we continue to strive to remain at the forefront of innovation. In June, we announced we entered into a strategic partnership with Partex Group to leverage artificial intelligence for drug development and health care sales marketing, potentially involving a digital health care sales marketing pharma platform with the overall ambition to reshape the future of the biopharma business model.
By combining Anavex's innovative small molecule precision medicine drug development platform and Partex's disruptive approach of AI-enabled drug development and health care sales marketing, this collaboration is intended to drive efficiency, effectiveness and innovation across the value chain with patient-centric focus at every step.
Additionally, we continue to expand and strengthen our patent portfolio for blarcamesine with a new U.S. patent awarded expanding Anavex's patent coverage of certain crystal forms of blarcamesine compositions, process of preparation and uses thereof.
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.

Sandra Boenisch

Thank you, Christopher, and good morning to everyone. I am pleased to share with you today our third quarter financial results.
During our most recent quarter, our general and administrative expenses remained consistent year-over-year at $3.2 million.
Our research and development expenses for the quarter were $10.3 million as compared to $9.3 million in the comparable quarter of fiscal 2022. The increase in research and development costs year-over-year was primarily a result of our expanded team as well as a sustained increase in drug manufacturing activities and development for future clinical and potential market supply.
Overall, we reported a net loss of $11.3 million, which is $0.14 per share, inclusive of $3.9 million in noncash items.
Our cash position at June 30 was $154.8 million. During the quarter, we utilized cash and cash equivalents of $7.7 million to fund operations. At our current cash utilization rate, we believe we have -- continue to have sufficient cash runway to fund our operations and clinical programs beyond the next 4 years.
Thank you. And now I will turn it back over to you, Christopher.

Christopher U. Missling

Thank you, Sandra, and this is a really exciting time for the company and we remain on track to -- for readouts of completed clinical trials and initiation of additional biomarker-driven precision medicine clinical trials as planned. I would now like to turn the call back to Clint for Q&A.

Question and Answer Session

Clint Tomlinson

Thank you. (Operator Instructions) So our first question is coming from Soumit Roy at Jones Research.

Soumit Roy

Congratulations on the solid quarter and all the progress. A question on the Alzheimer program. Are the patients continuing on a long-term study? And any progress on the confirmatory study to initiate on?

Christopher U. Missling

Yes. Excellent question. So the patient on the extension study actually has given -- was given a name. It's called the ATTENTION-AD study and it's going over 96 weeks. We have been -- heard from KOLs that actually this extension study could be the confirmationary study of the ANAVEX 2-73 Phase II/III study itself.
So we want to basically put this in context and see how this will progress. Accordingly so, we might already have started this confirmatory study with that open-label study, but it will be determined in discussions with regulatory agencies. But we would, of course, be able to without a problem initiate a study if so required at anytime.

Soumit Roy

I see. Do you have any date in mind when the FDA conversation could happen if this study can translate into a confirmation study?

Christopher U. Missling

Yes. We are planning to do this once the data is available, which is expected this year. And thereafter, agency is able to address things with data as well and that's what will happen with data -- in presence of data.

Soumit Roy

Okay. And the biomarker study data, is that -- could you give us some color on how many patient results going to present an expectation because this is not a targeted agent towards them and like (inaudible). So what should be Street's expectations? And could you refine the time line? Is it going to be later like in November time line? Or it could be earlier in third quarter?

Christopher U. Missling

I would say we keep the -- we want to surprise the market. So we -- it's the second half of this year and we'll be able to then provide the data once it's available.
And regarding the color, so it will be the entire participants of the trial and the majority of them have received blood biomarker assessment before and after as well as MRI assessment and a smaller sample size has also received CSF samples. So this is right now the entire population of the trial.

Soumit Roy

Well, that is really helpful. And one last question on the Rett program. Clearly, you are heading towards getting the top line data from the EXCELLENCE study. How are you thinking path forward? Are you thinking about commercializing yourself? Or is it going to be a partnership program? If it's going to be by Anavex, the commercialization part, when should we start thinking about hiring the commercial team?

Christopher U. Missling

Yes. Excellent question. So with the collaboration with Partex, we already initiated the strategizing on the sales force numbers, the expansion of marketing strategies. But also, we received unsolicited interest from -- across the globe in all regions of the world -- from all regions of the world to either co-market or to license blarcamesine for Rett syndrome already.
So we have multiple options open end. We try to do the -- make a decision based on shareholder value, so what will create more shareholder value accordingly. And we will base that decision on -- based on that information once we are able to get the term sheet on the table. It will likely happen after the data is out.

Clint Tomlinson

I don't see any other analyst questions. Dr. Missling. If there's anything that you want to add here, you're more than welcome to.

Christopher U. Missling

Thank you very much. I think the question from Soumit was very comprehensive.
Again, we like to very much point out that we're looking forward to a very excited second half of this year. We are very excited about the potential of what we built. We're expecting further publications and -- of our biomarker-driven precision medicine studies, which have all significant unmet need and economic burden. And we remain focused on execution as we prepare for a pivotal year ahead of us, potentially involving meaningful advances in our neurodevelopmental, in neurodegenerative precision medicine portfolio.
Thank you very much, and stay tuned. Looking forward.

Clint Tomlinson

Thank you, Dr. Missling. Ladies and gentlemen, that will conclude our call for today. We appreciate your participation, and you may now disconnect.