Q4 2019 Earnings Call

December 16, 2019

Operator: Good afternoon. My name is Hilda, and I'll be your conference call operator today. Welcome to the Anavex Life Sciences to Announce Fiscal 2019 Q4 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, Clint Tomlinson. Please go ahead.

Good afternoon, My name is field and I'll be your conference call operator today.

Welcome to the Anavex life Sciences to announce fiscal 2019 fourth quarter financial results Conference call.

A reminder, this conference call it seemed like accordingly.

I would I like to introduce your host for today's conference claim Thomas. Please go ahead.

Thank you and good afternoon, everyone.

Clint Tomlinson: 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 fiscal 2019 and provide a clinical study update. A taped replay of this call will be available approximately 2 hours after the call's conclusion and will remain available for 1 month. The call will also be available for replay on Anavex's website, 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 prepared remarks, and then we will take questions from equity analysts. Before we begin, please note that during this conference call, the company will make some projections and forward-looking statements regarding future events. We encourage you to review the company's filings with the SEC.

We appreciate you joining us today for Anavex Life Sciences conference call and webcast.

Our agenda is to review the Companys financial results for fiscal 2019 and provide a clinical study update.

Taped replay of this call will be available approximately two hours after the call's conclusion.

And will remain available for one month.

The call will also be available for replay.

On out of excess website www dot Anavex dotcom.

With us today Dr. Christopher mostly.

President and Chief Executive Officer.

And solder Burnish principal financial officer.

Dr misleading and Miss Burnish, well make prepared remarks, and then we will take questions from equity analyst.

Before we begin please note that during this conference call the company will make some projections and forward looking statements regarding future events.

We encourage you to review the company's filings with the FCC.

Clint Tomlinson: 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 those 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. With that, I'd like to turn the call over to Dr. Missling.

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 could differ materially from those described in those forward looking statements.

These factors may include without limitation.

Risks inherent in the development indoor commercialization of potential products.

Uncertainty in the results of clinical trials or regulatory approvals.

Need an ability to obtain future capital.

And maintenance of intellectual property rights.

And with that I'd like to turn the call over the Doctor mostly.

Thank you I like to thank everyone for joining us today.

Christopher Missling: Thank you. I'd like to thank everyone for joining us today conference call to review our fiscal 2019 financial results and share with you our clinical updates for ANAVEX 2-73 or also called blarcamesine. First, in the US, the US Food and Drug Administration, FDA, granted the Rare Pediatric Disease, RPD, designation for ANAVEX 2-73 for the treatment of Rett syndrome. The RPD designation provides the opportunity for the award of a pediatric review voucher at the time of marketing approval. In a recent peer-reviewed journal, preclinical data of ANAVEX 2-73 in Rett syndrome in a study entitled ANAVEX 2-73 blarcamesine, a sigma-1 receptor agonist, ameliorates neurological impairments in a mouse model of Rett syndrome, confirmed, with a proof of concept, the ongoing Phase 2 clinical studies.

Conference call to review, our fiscal 2019 financial results and shared with you all Occidental updates on the next 273 or also called Lark commenting.

Huh anyway.

First the U.S. food and drug administration that FDA granted to wrap exotic disease.

Our Pee Dee designation for Anavex 273 for the treatment of Rett syndrome.

The RPD designation provides the opportunity all the award our patriotic with you about shot at the time of marketing approval.

In a recent peer reviewed journal preclinical data off on the next to him three in Rex syndrome, you know study and title on an excess inventory block caused the museum in segment. One is that the August I mean do rights neurological impairment in a mouse model right syndrome.

From a proof of concept the ongoing phase two clinical studies.

All participants access to another six to seven three after completion of the I'd like to have three U.S. pays to Rex and drug study and the other top Rex interim study.

Christopher Missling: To offer all participants access to Anavex 2-73, after completion of the Anavex 2-73 US Phase 2 Rett syndrome study and the AVATAR Rett syndrome study, 12-week and 48-week open-label extension studies respectively were initiated. Currently, 90% and 100% of eligible participants have continued into the corresponding extension studies. The EXCEL Rett syndrome study of Anavex 2-73 in pediatric patients was approved by the Australian Human Research Ethics Committee and is scheduled to initiate early 2020.

12 week and 48 week open label extension studies, respectively were initiated currently 90% and 100% of eligible participants have continued into the corresponding extension studies.

The international accidents, Rett syndrome study or on an exclusive of three in pancreatic patients was approved by the Australian Human Resource Ethics Committee and it's got you all to initiate early 2020.

On the next life Sciences, because that the data at the trough clinical trials of Alzheimer disease. He past 2019 conference reporting baseline matched we won.

Christopher Missling: Anavex Life Sciences presented data at the 12th Clinical Trials on Alzheimer's Disease, CTAD, 2019 conference, reporting baseline-matched real-world external control data of Alzheimer's Disease Neuroimaging Initiative, ADNI, with ANAVEX 2-73 Phase IIa clinical data, demonstrating a significantly lower cognitive decline of the sufficiently dosed ANAVEX 2-73 Phase IIa study cohort compared to the ADNI control cohort at the interim 2-year, which is a 104-week time point. Separately, abundance of two relevant families of bacteria were identified as potential biomarkers of response from the 2-year study interim clinical data analysis of ANAVEX 2-73. Enrollment for the Phase 2b/3 ANAVEX 2-73 Alzheimer's disease study is nearly 50% recruited.

Total control data on an ex disease, nor imaging initiative acne with Arvixe was having three phase three clinical data demonstrating a significantly lower cognitive decline over the sufficiently dose on the next 273 phase two a study coolatta compared to the omni control cohort at the end.

From two yeah, which is 104 week time point.

Separately abundance of to a relevant relevant families bacteria, we identified potential biomarker of response from the two yet study interim clinical data analysis on an exclusivity fee.

Enrollment for the phase to be slide three on the next two centsthree opt somebody sees study is nearly 50% recruiting.

Christopher Missling: To offer all participants of the study access to ANAVEX 2-73, a voluntary 96-week open-label extension study, called ATTENTION-AD, was initiated, and currently 95% of eligible participants have opted into the extension study. Enrollment for the Phase 2 ANAVEX 2-73 Parkinson's disease dementia study is expected to be completed by the end of December 2019, with top-line data expected mid-2020. To offer all participants of the study access to ANAVEX 2-73, a voluntary 48-week open-label extension study, including microbiome assessment, was initiated, and currently 100% of eligible participants have opted into the extension study. 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.

All participants are the study access to an exclusive of three a voluntary 96 week open label extension study called attention. A D was initiated in currently 95% of eligible participants have opted into the extension study.

Enrollment for the phase two Anavex 273, Parkinson disease dimension study is expected to be completed by the end of December 2019, with topline data expected mid 2020.

All participants are the study access to Anavex 273.

Well I'm, sorry, 48 week open label extension study, including Microbiome assessment was initiated and currently 100% of eligible participants have opted into the extension study.

And now I would like to direct to call to some to punish principal financial officer of Anavex. My brief financial summary of the recently reported quarter.

Thank you Christopher good afternoon, everyone.

Sandra Boenisch: Thank you, Christopher. Good afternoon, everyone. During fiscal 2019, we made significant progress in the advancement of clinical studies for ANAVEX 2-73, as Christopher has just described. We were able to continue to advance with fiscal responsibility by utilizing non-dilutive grants from the Rett Foundation and the Australian government third-party support in order to fund our operational objectives beyond the next 24 months. Our operating expenses for fiscal 2019 increased to $29.1 million from $19.3 million in fiscal 2018. However, these operating expenses do include approximately $6.4 million in non-cash accounting charges. The increase in operating expenses is attributable to an increase in research and development expenses of $9 million in 2019, from $13.3 million in fiscal 2018 to $22.3 million in fiscal 2019.

During fiscal 2019, we made significant progress in the advancement of clinical studies for Anavex 273, as Christopher has just described.

We were able to continue to advance with fiscal responsibility by utilizing non dilutive grant.

<unk> Foundation and the Australian Government third party support in order to find our operational objectives beyond the next week or month.

Our operating expenses for fiscal 2019 increased 29.1 million 19.3 million in fiscal 2018.

However, these operating expenses do include approximately 6.4 million in noncash accounting charges.

The increase in operating expenses is attributable to the increase in research and development expense that 9 million in 2018, and 13.3 million in fiscal 2018 to 22.3 million in fiscal 2019.

We reported net other income of 2.9 million, which includes Australian research and development et cetera.

Sandra Boenisch: We reported net other income of $2.9 million, which includes Australian research and development incentive income of AUD 2.2 million. During fiscal 2019, we utilized cash of $18.5 million to fund our operations, compared to $12.6 million during fiscal 2018. Our cash position at 30 September 2019 was $22.2 million. Thank you. Now I will turn the call back over to Christopher.

Point 2 million.

[noise] during fiscal 2019, we utilize cash of 18.5 million to find their operations compared to 12.6 million during fiscal 2018.

Cash position at September Thirtyth between 18 was 22.2 million.

Thank you and now I will turn the call back over Christopher.

Thanks, Sandra in summary, we continue to make steady progress towards reaching several important milestones and we are poised for an exciting 2020 with multiple data read out.

Christopher Missling: Thank you, Sandra. In summary, we continue to make steady progress towards reaching several important milestones, and we are poised for an exciting 2020 with multiple data readouts. We look forward to provide further updates as advancements continue. I would now like to open the call for questions. Operator, please go ahead.

For want to provide further updates as advancements continue I would now like to open the call for questions. Operator. Please go ahead.

At this time it will be conducting a question and answer session for equity analysts. If you like to ask a question. Please press star one on your telephone keypad, a confirmation tone well indicate your line is then Q question.

Operator: At this time, we will be conducting a question and answer session for equity analysts. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in queue for questions. You may press the pound key or hash key if you would like to remove your question from the queue. Our first question comes from Raghuram Selvaraju from H.C. Wainwright.

You may pressed the punky or hash key if you will like to remove your question from the Q.

Our first question comes from rock Ram Selvaraju from H.C. Wainwright.

Good afternoon. This is that remarks on for Rob I appreciate taking your questions.

Edward R. Hammond: Good afternoon. This is Edward R. Hammond on for Ram. I appreciate you taking our questions. What's the scope and design of the pediatric Rett syndrome trial, and are the efficacy endpoints similar to those used in the adult trials?

Edward Marks: Good afternoon. This is Edward R. Hammond on for Ram. I appreciate you taking our questions. What's the scope and design of the pediatric Rett syndrome trial, and are the efficacy endpoints similar to those used in the adult trials?

What's the scope and design of the pediatric Rett syndrome trial in our the efficacy endpoints similar to those using the adult trial.

It's a very good question. Indeed, so the endpoints are similar to the right adult study and appeared to have the study is a 12 week period study with an additional extension period.

Christopher Missling: It's a very good question. Indeed, the endpoints are similar to the Rett adult study, and the period of the study is a 12-week period study with an additional extension period. The extension will be open label, but the randomized controlled part will be 12 week long.

And the extension will be open label up the randomized controlled part will be 12 week long.

Perfect and they're looking at the see Ted presentation, what's the pathological significance of those two bacterial families in Alzheimer's patients and is there any indication that these would also be implicated in Parkinson's disease.

Edward R. Hammond: Perfect. Looking at the CTAD presentation, what's the pathological significance of those two bacterial families in Alzheimer's patients? Is there any indication that these would also be implicated in Parkinson's disease? What microbiome markers might be in Parkinson's context?

Edward Marks: Perfect. Looking at the CTAD presentation, what's the pathological significance of those two bacterial families in Alzheimer's patients? Is there any indication that these would also be implicated in Parkinson's disease? What microbiome markers might be in Parkinson's context?

And what micro biomarkers might be in Parkinsons contacts.

So they're very relevant for two reasons they is a.

Christopher Missling: They're very relevant for two reasons. There is evidence of data showing that the gut microbiota is corresponding with the brain and vice versa. It looks like there is an increase of variations of gut microbiota in healthy subjects compared to patients, both Alzheimer's and Parkinson's. The question is related also to Parkinson's. The goal is now to find out if these could be used as biomarker. To answer that question, we included in the Parkinson's study also microbiota assessment before and after. That is one of the data points which we did from the Phase IIa, which was only at one point.

Data evidence of data showing that the gut microbiome <unk> is a corresponding with the brain and vice versa and it looks like the is I increased.

Days, an increase of various variations of gut microbiome <unk> in healthy.

Subject compared to patients. Both also mine Parkinson. So the question is related also to Parkinson and the goal is now to find out if these could be used as biomarker and to answer that question. We included in the Hokanson study.

Also microbiota assessment before an off doll and that is one off to the data points, which we did from the faced way was only at one point. So we still have to confirm that does affect is correlated with it and impact on the drop which we believe because the correlates with the concentration of the drug I've met.

Christopher Missling: We still have to confirm that this effect is correlated with an impact on the drug, which we believe because it correlates with the concentration of the drug administered to the patients and the respective response. Ultimately, what we need at this point in time is a before and after measurement of this gut microbiota, and that's what we are now doing in the Parkinson's disease study. Eventually we will be able to answer that question, how and what relevance these microbiota variations have in patients in Parkinson's and also in Alzheimer's disease.

Stuck to the patients and their respective response, but ultimately what we need at this point in time is a before and after measurement of discuss Microbiota and that's why we're now doing in the pockets in the study. So eventually we will be able to answer that question, how and what relevance. These microbiome.

Uh huh.

Variations half in patients in pockets and and also in ultimate disease.

Alright, and thinking with Alzheimer's when do the phase to be three ultimately are likely to reach full enrollment and would you say that the enrollment pizza speeding up static or currently flowing down.

Edward R. Hammond: All right. Sticking with Alzheimer's, when is the Phase 2b/3 Alzheimer's trial likely to reach full enrollment? Would you say that the enrollment pace is speeding up, static, or currently slowing down?

Edward Marks: All right. Sticking with Alzheimer's, when is the Phase 2b/3 Alzheimer's trial likely to reach full enrollment? Would you say that the enrollment pace is speeding up, static, or currently slowing down?

So we expect actually increased enrollment because we are adding sites. We have to appreciate that so far the enrollment has been exclusively in Australia and I understand that we have reached the highest enrollment in Australia ever it mystery of a optima study.

Christopher Missling: We expect actually a increase in enrollment because we're adding sites. We have to appreciate that so far the enrollment has been exclusively in Australia. I understand that we have reached the highest enrollment in Australia ever in the history of a Alzheimer's study enrollment in terms of numbers recruited of Alzheimer's patients. Now we're expanding to additional territories, and this will allow what we believe in addition to the existing sites in Australia for an uptick in enrollment speed for the Alzheimer's study. We have not yet set a target when we are completing enrollment, but we will communicate that as soon as we have that available, and we can make that confirmation when the study will be fully enrolled.

Enrollment in terms of numbers recruit of onto my patients. So now we are expanding two additional territories and to this will allow of what we believe in addition to the existing.

Sites in Australia boy in uptick in enrollment speed of for the Ultimate study.

We have not yet set a target when we are completing enrollment, but we will communicate that as soon as we have that available and we can make that a confirmation when the study will be fully enrolled.

Got it looking forward to it and then on a broader level assuming positive data in the Parkinson study with what kind of what kind of insight what would next steps looked like for the drug in this indication.

Edward R. Hammond: Got it. Looking forward to it. On a broader level, assuming positive data in the Parkinson's study with blarcamesine, what would next steps look like for the drug in this indication?

Edward Marks: Got it. Looking forward to it. On a broader level, assuming positive data in the Parkinson's study with blarcamesine, what would next steps look like for the drug in this indication?

We would probably she had this with regulatory authorities.

Christopher Missling: We would probably share this with regulatory authorities and seek guidance how this data could be then leading to moving this forward towards approval. Since Parkinson's disease dementia has not received yet a drug which seems to be utilized in the community, there's only one drug approved which however does not get used because of significant side effects, that will be the next step.

And to see guidance, how this data could be than leading to a moving this forward towards approval since parkinson disease Dimensionalize not received yet a a drop which seems to be utilized in the community. There's only one drug approved which however does not get used to.

Because of significant side effects.

That will be the next step.

Perfect I appreciate all the detail. Thank you.

Edward R. Hammond: Perfect. I appreciate all the detail. Thank you.

Edward Marks: Perfect. I appreciate all the detail. Thank you.

Christopher Missling: Thank you.

Thank you.

Once again for any questions. Please press star one.

Operator: Once again, for any questions, please press star one. Our next question comes from Yun Zhong from Raymond James.

Our next question comes from you on song from Yes.

Hi, Thanks to the question so two questions on directional program.

Yun Zhong: Hi. Thank you for taking the question. Two questions on the Rett syndrome program. Are you waiting for initial data from the Phase 2 Rett study and the Australian study before you will initiate the pediatric study? If not, what will be the rate limiting steps that you will have to complete before you will be able to initiate the pediatric study?

For initial data from the phase two study and Australian said.

Before you will initiate the pediatric study right now and what Rick limiting.

That's that's who will have to complete.

It's an issue.

Gardner.

So we are not.

Christopher Missling: We are not really waiting for that, but there's certainly a chance that this will overlap a little bit. There's not like a dependency, a directly correlated dependency.

Really waiting for that but there's certainly a chance that this will overlap a little bit so, but it's not like our dependency directly correlated dependency.

Okay and then given that this is the Kurt study was up quite meaningful per person close to 70 patients for orphan indication what's the potential.

Yun Zhong: Okay. Given that this is the third study with a quite meaningful number of patients, close to 70 patients for an orphan indication, what's the potential, just assume that the data are positive, what's the potential for the study to serve as a pivotal study?

Since that that data are positive what's the potential for the study should serve as a pivotal study.

Which one if I am a harder to that pediatric southern yeah. So we are planning and this still to be confirmed but given that we have knowledge about design for this indication we're planning to powered the study. So this could be calm and could be sufficient.

Christopher Missling: Which one, if I may ask?

Yun Zhong: The pediatric study.

Christopher Missling: Yeah. We are planning, and this still to be confirmed, but given that we have knowledge about designs for this indication, we're planning to power the study so this could become and could be sufficiently as a pivotal study. The two additional studies in adult Rett syndrome would be obviously also utilized as supportive for that strategy.

As a pivotal study and the two additional studies in adult Rett syndrome will be of the also utilized as.

Supported for that for that for that strategy.

Yun Zhong: Okay. Last question on the dose that is currently valued in the Parkinson's disease dementia study. Can you remind us how do they compare to the higher concentration and lower concentration that you achieved in the Alzheimer's study?

Okay and last question on the dose that is currently valued the Parkinson's dimensions, but can you remind us how to the compare to the higher costs Christian Chabot customers that's true.

Alzheimer's studies.

Yes, so the dose is actually very similar to the dose in the optima face to face study, where we have.

Christopher Missling: Yeah. The dose is actually very similar to the dose in the Alzheimer's Phase 2a study where we are aiming for a high dose and a medium dose, and we believe both doses have potential to be efficacious, both the medium dose as well as the high dose.

We are aiming for a high dose in a medium dose and we believe both doses have.

Potential to be efficacious, both the medium dose as well as the high dose.

Okay, great. Thank you.

Yun Zhong: Okay, great. Thank you.

Christopher Missling: Thank you.

Thank you.

Thank you at this moment, we show no further questions.

Operator: Thank you. At this moment, we show no further questions. Mr. Tomlinson, do you have any final remarks?

Okay.

Mr. Tomlinson do you have any final remarks.

We like to thank for participants in today's conference call I Hope that based on the described development. Today you are looking forward to 2020 as much as we are should you need additional information or have any questions. Please visit our website at www Dot com.

Christopher Missling: We'd like to thank all participants in today's conference call. I hope that based on the described development today, you're looking forward to 2020 as much as we are. Should you need additional information or have any questions, please visit our website at www.anavex.com or call or email us. This concludes our remarks for today. Operator?

Clint Tomlinson: We'd like to thank all participants in today's conference call. I hope that based on the described development today, you're looking forward to 2020 as much as we are. Should you need additional information or have any questions, please visit our website at www.anavex.com or call or email us. This concludes our remarks for today. Operator?

Our call email us this concludes our remarks today operator.

Thank you ladies and gentlemen, this concludes our call today you may now disconnect.

Operator: Thank you. Ladies and gentlemen, this concludes our call today. You may now disconnect.

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