Anavex Life Sciences Corp. (NASDAQ:AVXL) Q2 2024 Earnings Call Transcript

Anavex Life Sciences Corp. (NASDAQ:AVXL) Q2 2024 Earnings Call Transcript May 9, 2024

Anavex Life Sciences Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. And welcome to the Anavex Life Sciences Fiscal 2024 Second Quarter Conference Call. My name is Clint Tomlinson, and I will 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 use the Q&A box or raise your hand. 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 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 would like to turn the call over to Dr. Missling.

Dr. Christopher 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’re encouraged by the very recently issued FDA guidance for early Alzheimer’s disease which states that one cognitive measure alone like ADAS-Cog could be a sufficient primary endpoint for early Alzheimer’s disease. We appreciate this new guidance and believe this opens another possible pathway for us to move forward in parallel to the initiated process of market authorization application to the European Medicine Agency, EMA, for blarcamesine for the treatment of Alzheimer’s disease which is already underway. Full data from the blarcamesine study in Alzheimer’s disease Phase 2b/3 placebo-controlled clinical trial will be published in an upcoming peer-reviewed journal, as well analysis of RNA sequencing of the trial is underway and interim data is expected by mid-2024.

Concurrently, the ATTENTION-AD open-label extension trial is ongoing and we expect to be able to share interim data in the second half of 2024. In Rett syndrome, continued positive real-world evidence feedback from Rett syndrome patients and caregivers participating in the ongoing open-label extension trial and Compassionate Use Program for patients who participated in the EXCELLENCE trial encourages us to continue our partnership with the Rett syndrome community and to proceed with a Phase 3 12-week efficacy study. An educational presentation will be provided at the 2024 IRSF Rett Syndrome Scientific Meeting, taking place this year June 18, 2024 to June 19, 2024. Regarding Parkinson’s disease, initiation of an ANAVEX2-73 Phase 2b/3 six-month trial is expected in the second half of 2024.

In Fragile X, new specific translatable and objective biomarker data generated with ANAVEX2-73 supporting the initiation of the potentially pivotal ANAVEX2-73 Phase 2/3 clinical trial will be presented at the 19th National Fragile X Foundation Conference taking place in July 25, 2024 to July 28, 2024. Related to a new rare disease, we are also in preparation to initiate a potentially pivotal ANAVEX2-73 Phase 2/3 trial. With respect to ANAVEX3-71, we are quite pleased to provide an update that the placebo-controlled Phase 2 clinical trial of ANAVEX3-71 for the treatment of schizophrenia. The study is well underway with the first cohort of schizophrenia patients being fully enrolled. We are also expecting further peer-reviewed clinical publications in both — involving both ANAVEX2-73 and ANAVEX3-71.

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Q&A Session

And now I would like to direct the call to Sandra Boenisch, Principal Financial Officer of ANAVEX, for a financial summary of the recently reported quarter.

Sandra Boenisch: Thank you, Christopher, and good morning to everyone. I’m pleased to share with you today our second quarter financial results for the 2024 fiscal year. Our cash position at March 31st was $139.4 million. During the quarter, we utilized cash and cash equivalents of $11.7 million in operating activities after taking into account changes in non-cash working capital accounts. At our current cash utilization rate, we believe we have cash runaway of approximately four years. During our most recent quarter, our general and administrative expenses were $2.8 million, as compared to $2.6 million in the immediately preceding first quarter. Our research and development expenses for the quarter were $9.7 million, as compared to $8.7 million for the immediately preceding first quarter. And lastly, we are reporting a net loss of $10.5 million for the quarter or $0.13 per share. And thank you. Now back to you, Christopher.

Dr. Christopher Missling: Thank you, Sandra. This is an exciting time for the company and we are very excited to be entering a new phase of the company’s history with our biomarker driven precision medicine programs. I would now like to turn the call back to Clint for Q&A.

Operator: Thank you, Christopher. We’ll now begin the Q&A session. If you have a question, raise your hand or put it in the Q&A box. And it looks like our first call is coming from Soumit from Jones Research. You should be live, Soumit.

Soumit Roy: Yeah. Hey, congratulations on all the progress and a few questions on the FDA guidance. It’s oftentimes a bit qualitative and trying to understand, read through the line, when they’re saying strong biomarker and strong statistical data to support the clinical outcome on the cognition front. How do you really interpret that? When you’re looking at amyloid 42 over 40 ratio, the error bars when you compare with the company is just because of the cohort size is a little larger. How many patients was there and do you see these to be considered strong or FDA would ask for a larger trial? Just curious about your thoughts.

Dr. Christopher Missling: So the key background is that for the biomarker of Aβ changes in placebo versus active arm, we have to be reminded that the mechanism of our drug is not an antibody removing Aβ drug, but it’s an orally available, once daily, easy-to-administer and scalable drug and has for that a lot of convenience features, which the antibodies don’t have, in addition to the fact that they are having challenges with the black box warning, which they have been given. So there’s also a challenge from safety and repeated safety measures on MRI are required. Regarding the biomarker data of the Aβ, we were intrigued, but on the other hand, not surprised that we saw a reduction of Aβ in the brain measured by the plasma Aβ42/40 ratio, which is the analogy of measuring a PET Aβ level in the brain, which is intuitively easy — easier to understand, because you are showing a decline in the brain.

But the Aβ42/40 ratio, which again is representative of this fact of reduction of Aβ in the brain is then measured in the plasma and shows as an increase of this ratio, favorably showing a decrease in the brain. So if the ratio goes up, that means Aβ in the brain goes down. So since we don’t target Aβ directly with our drug, but have a more upstream mechanism of action, again, we were intrigued and surprised to see in all patients, there was no sub analysis in this analysis of the Aβ ratio showing a significant decline. So now it’s a question of dialogue with the agency, how this will be interpretable as a biomarker. But I’d like to also point out we have a second strong biomarker, which probably even is stronger, specifically from a p-value perspective, which is the changes in the atrophy of the brain.

So in the pathology of the Alzheimer’s disease, there is a very well understood feature of shrinking of the brain over time. And this is intuitive, if the brain is shrinking is less active, it cannot have as good memory or activities of execution and function as the brain was not shrinking. And we noticed in our trial, a significant stopping of the shrinking of the brain with ANAVEX2-73 blarcamesine in the active arm, compared to placebo. So the placebo arm continues to shrink the brain in the patients, while they are on placebo, which is standard-of-care, by the way, it’s not placebo itself, it’s including donepezil, memantine. So all the data is always on top of standard-of-care, which is today approved, includes approved drugs. And however, the active arm on blarcamesine or ANAVEX2-73 shows a significant separation from the placebo by not shrinking the brain any further or delaying the shrinking of the brain in many regions of the of the brain and this exact data will be part of the publication, which we’re expecting.

So I think once this data comes out, I think that we can re-discuss the impact of that biomarker in combination with the Aβ biomarker. And again, with the Aβ biomarker, I’d like to remind again, we did not target with our drug directly Aβ. So it must be a downstream effect of the upstream feature of the sigma one receptor, showing also the impact on the entire population in our trial.

Soumit Roy: These are truly encouraging data. You have quite a few catalysts coming up in the next probably three months. I’m trying to understand what would be the strategy when you go to FDA, would you wait for the open-label extension on trial data to come out along with the publication and completion of the European filing and then approach to FDA with the totality of data with biomarker and the long-term, or would you do before that, meet with FDA before the long-term extension on trial data?