Q3 2019 Earnings Call

My name is feel that and I will be your conference call operator for today.

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

As a reminder, this conference call is being recorded.

I will now like to introduce your host for today's conference Glenn Tomlinson.

Pitt. Please go ahead.

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.

The third quarter of fiscal 2019.

And provide a clinical study update.

A 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 Anavex as web site.

Www Dot Anavex dotcom.

With us today.

As Dr. Christopher misleading.

President and Chief Executive Officer.

And Sandra Bonefish principal financial officer.

Dr misleading and Miss Bona you will 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 progress projections and forward looking statements regarding future events.

We encourage you to review the Companys filings with the FCC.

This includes without limitation.

The Companys 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 development or commercialization of potential products.

Uncertainty in the results of clinical trials.

For 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. mislead.

Thank you.

I'd like to thank everyone for joining us on today's conference call to review, our fiscal 2019 third quarter financial results.

And share with you our clinical update for Anavex 273.

Or also called block commenting.

Nonproprietary name adopted by the United States adopted names counsel U.S.A. and.

First we are very pleased to report that enrollment for the U.S. phase two Rett syndrome study.

And the other top Rett syndrome study.

Lars comment Mark common theme on advancing with high priority.

The independent data safety monitoring board for the U.S. phase two Rett syndrome.

Audio floor common Xen completed its recent pre plan review.

The preliminary phase two efficacy and safety data.

Upon review of the most recent data that the SMB made the recommendation to continue the study without modification.

Which is very good news.

We are also very pleased that the face to block Doesnt mean.

Hokanson disease dementia study is proceeding well.

And we are getting close to achieving full enrollment.

Further.

At the request of investigate us in order to offer all participants of the clinical study access to block commencing.

A voluntary extension of this study is in preparation.

Including microbiome assessment.

Enrollment for the phase two be stage three larkham is the ultimate disease study.

It's also continuing at its planned pace.

With over 50 active recruiting clinically how tough to date.

Furthermore.

At the request of investigator in order to offer all participants of the clinical study access to block commencing a voluntary extension of this study is planned.

Lastly, a recent third party peer reviewed scientific publication.

Titled Neuronal Sigma one receptor.

Signaling functions and protect it rolled in neuro degenerative diseases detailed the mechanism of action of Sigma one receptor to us.

S. One our end references Anavex 273, among the relevant Sigma one receptor ligand.

The paper summarizes.

In conclusion.

Sigma one receptor is incredibly versatile in its ability to foster neuronal hormones spaces in the context of several neurodegenerative disorder.

We believe that this comment is a confirmation that anavex is on the right track pursuing this very promising therapeutic approach for targeting patients with devastating rare diseases.

As well as the largest unmet medical need of aging population.

Which is ultimately disease and parkinson disease.

And now I would like to direct the call to Suncor Burnish principal financial officer of analytics for a brief financial summary of the recent reported quarter.

Thank you Christopher and good afternoon, everyone.

During the third quarter of fiscal 2019, operating expenses were $7.1 million compared to $4.6 million for the comparable quarter in fiscal 2018.

The increase in operating expenses is attributable to higher research and development expenses compared to the same period last year.

Research and development expenses for the quarter were 5.8 million up from 3.0 million reported in the third quarter of fiscal 2018.

The increase in research and development expenses is a result of expenses incurred in connection with the advancement of clinical studies for pharmacy.

The net loss for the quarter was $7.1 million or 14 cents per share.

As compared to $2.8 million or six cents per share in the comparative quarter of fiscal 2018.

Our cash resources at June Thirtyth, 2019 were $21.2 million.

Subsequent to June Thirtyth, we received 1.6 million in research and development incentive income in cash from the Australian authorities.

We believe that we have sufficient cash resources and support from third parties to fund our objective.

And our ongoing clinical trials for in excess of two years.

With that I, Thank you and I will turn the call back to Christopher.

Thank you Sandra in summary, we continue to be actively focused on execution of the ongoing clinical studies for black comedy.

And we are very pleased with the pace at which these studies advancing.

We look forward to providing further updates as advancements continue.

I would like now to open the call for questions. Operator. Please go ahead.

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.

Our confirmation Tom will indicate your line is open the question queue.

You May press.

Sorry to ask you like to remove your question from the Q or the hash key.

Our first question comes from young Chung from Janney capital.

Hi, Thank you for the questions and so the first question is was there any specific reason that triggered the DSMB did a review.

For example, a certain percentage patient enrollment.

Yes that was a.

Cohort, which we had.

Included in a.

Intensive PK, where the PK was measured at a very often regularly and the patient had to stay overnight and the debt was accomplished and that target a review and in that review was.

Efficacy measures of the schools as well as safety.

Measures.

Okay to confirm so the review was.

Don't only in debt intensive keep PK cohort or in all patients enrolled so far in the study.

Which was all enrolled patients it was equivalent it was the first enrolled patients off the study.

Okay and then the next question is looking at the two phase two studies in Brett syndrome.

The precise seems to be almost identical and.

But.

Certainly the U.S. study is well ahead of the Australian study, so I wonder will the outcome from the U.S. that have any impact on your decision.

Whether to continue or discontinued.

Australian study and.

If you choose to continue post studies through completion.

Do you have.

An option to maybe combined the two study to a maybe a more comprehensive analysis.

Yeah. That's a good question. So the U.S. study had an initial intensive PK part, which was just mentioned and ultimately these two studies.

Are looking very similar and they operate similar for that reason and D. There will be.

Certainly.

No.

Consequence of one of the other two.

Change any.

The study, but after the DCB bought.

Positive review there is now.

Also no.

So no reason to change anything and.

Have a tough study.

So that will proceed.

As it intended.

Okay and last question can you remind us if you are getting any external funding support for the Avatar study.

The Avatar study is a study is funded by Arvixe and we are getting funding from the Australian government.

Okay. Thank you for taking my question.

Thank you.

The next question comes from RAC, Laura sell Barangaroo from H.C. Wainwright. Please go ahead.

Good afternoon. This is Ed remarks on for Rob I appreciate you taking the questions.

Just looking at the Rett syndrome studies I'm wondering if you could provide a little more granularity on the percentage of patients that have completed so far.

And how many are moving into that open label extension.

So we have reported in the last previous quarter that 40% had been already.

Enrolled and.

That number has only now increased.

We will make.

Not a specific announcement what is today because we will then announce when the enrollment will be completed.

And the first patient was.

Put or volunteer to go into the extension study, which is offered an extension study consists of a open label 12 week.

Continuation to stay on study drug and we expect that these extension study will be extended further.

As we also have done it in our previous clinical studies.

So we expect that to be not time limited.

The extension study.

Yeah.

Okay and wouldn't like data from the double blinded portion the reported and then when we look at some of the efficacy parameters being assessed which do you think are most likely to show the change over a seven week period and just wondering if these are also being assessed in the avatar trial.

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Yeah exactly the same in the artist a trial the endpoints are exactly the same both secondary as well as the primary.

Efficacy as well as a biomarker measures and.

We have seen a very significant effect in animal models on the motor impairment.

And we've seen a very.

A significant effect on the drug in the cognition and in the.

In D. behavior, all parts of the.

Phase two a asthma study.

So we have the expectation that if the animal study data is also translating into the human data that we should see in all those measures a signal.

In the clinical study in Rett syndrome patients.

Moving on to the Parkinson's dementia study I was hoping you could provide a little more information on what the enrollment status might be for that trial as well and then after it's fully enrolled when might the topline data become available.

The expectation is that we like that we have the study completed very soon.

Oh, we're almost there now.

And it's a great accomplishment.

By the team and do we know that the study has a of a 14 week treatment duration. So if we are able to complete the study that will then ER and needed to be added this 14 week.

Other than to have the data you know locked and then subsequently becoming a possibly available in a in a in a press release the topline data.

Excellent and then my final question just as a follow up to two previous question that was asked I'm just wondering if they're gonna be anymore, you SMB interim reviews or whether this was the single one that was expected.

In the Red study.

Yes.

The ism be has the isn't it independent or.

Independent Board, but these are big can make it any injunction at any point make a request for reviewing data. So we will not know that.

So that is the correct answer to this question.

Okay that makes sense all right well I appreciate you taking all the questions. Thank you.

Thank you.

We have a question from Jason Kolbert from Dawson James.

Yes, how did the <unk> claim Burger on there.

Jason Kolbert.

I just had a quick question about yeah.

[noise] AG study and.

If you think that primary completion date is still that yeah.

December 2020.

And then based on the results do you believe that there is a need and whether a second phase three trial.

I couldn't answer I couldn't hear the question very well do you mind repeating it was hard to hear.

Yes, sorry, sorry about that.

So for the for the Alzheimer's study you think primary completion date go stand at December 2020.

And then do you believe that you will need to conduct a second phase three trial correct or the approval when the Oscars tight.

So the.

The.

Expected date is providing clinical drug Dod golf and I think that's what you're referring to that's probably a estimate which.

We don't.

Provide it'll come from.

At this point in time, but obviously, we want to finish a study as soon as possible as I mentioned today in all our studies. They all are with the aim of the fall on a dawn undertaken to finish it as soon as possible.

But the question is so we will provide an update on the timing when we have more granularity on the overall continues enrollment which is very good so far.

So I would basically not provide a comment on the timing of the end of that study yet.

Regarding the question of if it is if a second study is needed.

That's also question I would Ah.

Defer to once we are able.

To share the data with the FDA with the agency and that determination is done by the agency. So its not not something which we can anticipate at this point.

Okay. Thank you so much for it simple question.

We have a young chung from Janney capital on line with a question.

Please go ahead.

Yes. Thank you for taking the follow up question. So.

The question is on Microbiota and very interesting data presented.

From the Alzheimer's patient population and now that you are going to look at Parkinsons patient population and I'm just curious on.

The level of similarity between our timeless disease in Parkinson's disease in terms of micro BARDA and their reaction to potential efficacious treatment.

Yes, it's a good question. So we presented data in July last month, it Hey, I see.

That.

The Anavex 273, black comedian was associated with a higher level of gut microbiome diversity.

In certain Microbiota families, which is a good thing.

It is.

Knowledge out there that in several studies that healthy.

Volunteers.

And have a higher diversity of gut microbiome into got then ultimate patient as well as parkinson patients. So that led us to the idea of now including that.

Intelligence that knowledge about this as a another piece of information to.

Check on the effect of Anavex 273, or block amazing that when we switch the patient from the PD study from the pocket disease dementia study into the open label extension that we can then.

Mounted to all the before and after of the gut microbiome of the patients who are on the placebo arm and then getting the drug as well as on the patients who are already on the drug and continues to to stay on the drug and that allows for a differentiate differential and analysis of the potential effect of the compound of the drug on the gut microbiome.

And since in Parkinson this applies as well as in Alabama, and the Optima study will take long until it's finished because its longer it's 48 week and the Parkinson's disease dementia studies 14, we could shorter we can make this.

This use of this new information of a biomark information in the Parkinsonism dementia study in for the first time sooner than in the Alzheimer's study, we might consider doing that also then.

If it's appropriate.

For the Ultimate study at a later stage.

Okay, great. Thank you for the added information.

Youre welcome.

[noise].

Uh huh.

We received a question from Ana Rural BA Bye from Roth Capital. Please go ahead.

I know your line is open.

We will move to the next question it comes from Tom Bishop from via research.

Hello there.

Well that microbiology data thing.

That we were just talking about.

Is this basically the idea that a eight to 73 wood.

Itself might improve the bacteria concentration or that.

Down the road you might consider using say fecal transplants or something to increase those.

Those bacteria that seem to be favorable.

Soon from the data we have seen a we believe.

And we have to confirm that or because the clinical study was measured any only at one point.

In time, the gut microbiome levels that the compound that Anavex 273 are a comedian is able to correlate with an improvement and those patients also had a higher diversity in the got.

So we will find out exactly that if that is triggered a lot by the drug.

And the expectation is that it is.

End of <unk>, we think that the concept of homeostasis might be not limited to a effects in the brain or in the central nervous system of Anavex 273, or black commenting.

But it might also.

Trickle down into the entire bodies homeostasis beneficial system.

So that would be then the signal of a better gut microbiome diversity, which is a preferred over lower level of diversity.

Wow.

Well I'll be interesting to see how that comes out so on the Red study I just wanted to be clear the six that were analyzed by the DSMB b.

For safety and efficacy.

That was part of the 15.

Or a separate core hole.

Cohort that preceded them.

The 15 and that was that was a cohort which will be.

ER, which was part of it and will be will precede at the the 15 patients.

So.

You're analyzing actually 21 hour.

That's exactly right the total number but in the Rett syndrome study is 15, plus six is 21.

Okay.

Is.

There was one part of the <unk> the press release that I had a little.

Little trouble with that now I don't see it.

Okay, Let me ask on to something else.

This this name for blur canvassing.

You said this was this was determined by an unrelated.

Entity.

I don't understand that the company doesn't get to pick the name of their drugs.

Yeah that is actually right. It's not a promotional name is slow generic name.

So that it's like Donepezil Phil.

Or or or whatever they will get to pick the name of your drug does right.

In the name is consist of a neutral or front part, which is the first apart and the N. part is demonstrating a sick my one receptor agonist. So to me the Dean part is depicting it's a consistent with Sigma one receptor and the Black car is an independent neutral what a was picked by the adopted a name you a council of the U.S. That's how this name was picked a when it comes to the naming of the commercial name. This will be a in our court to Oh find a name.

And ER, we are working with specialist on on on deciding what names to pick for commercial on name.

We received a question from Ana World be Eva from Roth Capital. Please go ahead.

Hi, Christopher I Hope My line is now open.

Yes.

Hello.

We can hear you.

Okay, Great [laughter]. Thank you my I have a twofold question on Rett syndrome question number one is really related to whether or not we might see any data come out from the extension patients do you think that will be part of the release for the U.S. study at least and.

Maybe we can get through that first thank you.

What was the question sorry, I couldn't hear exactly the flows were sure. We we I guess, we want to know whether or not any of the U.S. Tourette studies syndrome patients will we get any data from that one the Rett syndrome study reads out year end at least for the US One.

Yes. So we pointed out that we are looking forward to providing updates on those studies by year end and that would be a readout.

Okay. Thank you and my other question really also surrounds the Rett syndrome study and.

I'm here I, just wanted to know whether or not some of the data will be sort of really really granular in terms of understanding efficacy and safety for the various age groups. So thank you.

Sorry, what was exactly the question on that please.

Oh, whether or not the data when it does read out for the Rett syndrome study in terms of how granular or will it be will we see the data come out and be evaluated by age. So thinking about each segment I know that the patients are theres, a really wide range of age in terms of you know the enrollment I wanted to know whether or not the data will be segmented once it does read out.

We don't know yet how this will be.

Provided but we know that from the.

Practicality the patients are agent an older and I think we are in a range from 18 to 45 years old, but the practicalities most <unk> in the <unk> of the patients are closer to the 18 year old age group range. So it will actually not that will not likely be that diverse.

Okay. Thank you so much.

You're welcome.

[noise].

[noise].

I will like to turn the call back to Dr. misleading.

Thank you all for participating in today's conference call I hope that based on this drive developments today looking forward to the rest of 2019 as much as we are.

Should you need additional information or have any questions. Please visit our website Anavex dot com.

I will call or email us. This concludes our remarks for today operator please.

Ladies and gentlemen, this concludes our call today.

You may now disconnect.

[noise].