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Edited Transcript of AVXL earnings conference call or presentation 7-May-20 8:30pm GMT

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Q2 2020 Anavex Life Sciences Corp Earnings Call HOBOKEN Jun 11, 2020 (Thomson StreetEvents) -- Edited Transcript of Anavex Life Sciences Corp earnings conference call or presentation Thursday, May 7, 2020 at 8:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Christopher U. Missling Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary * Clint Tomlinson Anavex Life Sciences Corp. - Executive * Sandra Boenisch Anavex Life Sciences Corp. - Principal Financial Officer & Treasurer ================================================================================ Conference Call Participants ================================================================================ * Blair Daniel Cohen H.C. Wainwright & Co, LLC, Research Division - Associate * Tom Bishop BI Research ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon. My name is Adrianne, and I will be your conference call operator today. Welcome to the Anavex Life Sciences Fiscal 2020 Second Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded. I'd now like to turn the call over to your host for today's conference, Clint Tomlinson. Please go ahead. -------------------------------------------------------------------------------- Clint Tomlinson, Anavex Life Sciences Corp. - Executive [2] -------------------------------------------------------------------------------- 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 its second quarter of fiscal 2020 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 at 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. 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 of -- 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'd like to turn the call over to Dr. Missling. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [3] -------------------------------------------------------------------------------- Thank you. Thank you, everyone, for joining us on today's conference call to review our second quarter financial results and share with you some clinical updates for ANAVEX 2-73 or blarcamesine. Much has changed around all of us since our last quarterly conference call. As the world navigates COVID-19, Anavex paramount obligation has always been to ensure the safety of all participants in its clinical programs and the integrity of the studies in which they participate. We are responding to regulatory, institutional and government guidance and policies related to COVID-19. We remain focused on our clinical development plans and are working closely with all stakeholders to try to mitigate the effect of COVID-19 on the company's ongoing clinical trials for Rett syndrome, Parkinson’s disease dementia, and Alzheimer’s disease. Clinical sites continue to operate and see patients where possible in accordance with local regulations and site policies, regulatory, institutional and government guidance related to COVID-19. Clinical sites continue to screen and enroll patients into the active trials and the respective open-label extensions for the 2 Phase II Rett syndrome trials and the Phase IIB/III Alzheimer’s disease trial, while the Parkinson’s disease dementia Phase II trial has completed enrollment, and we expect to announce top line results from this study by mid-2020. Anavex proactively continues to bring on sites in new countries across programs, depending on the situation in each country of operations. While Rett syndrome protocols have always by default, allowed at-home visits, U.S. FDA, European EMA and Australian PGA recommended contingency plans are actively in place for the Alzheimer's disease Phase IIb/III study and the Parkinson’s disease dementia Phase II study to ensure remote virtual assessment for active patients and all respective extension studies. Because ANAVEX 2-73 is an oral formulation, study participants are able to receive shipments of their study medication in a controlled and compliant fashion, and direct-to-patient delivery is occurring in multiple countries. We understand that some activities will be temporarily slower because of COVID-19. However, our risk mitigation actions were implemented for every project, and Anavex's primary focus is on the safety of all involved and the continued conduct of our clinical programs as we navigate the pandemic together. Our sites understand why their patients participate in research and are committed to the importance of clinical trials for those patient communities currently without effective treatments. 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, Anavex Life Sciences Corp. - Principal Financial Officer & Treasurer [4] -------------------------------------------------------------------------------- Thank you, Christopher, and good afternoon, everyone. We reported a net loss of $7.2 million or $0.12 per share during the quarter. As compared to $7.2 million or $0.15 per share in the comparable quarter of fiscal 2019. Research and development expenses have remained consistent at $6.1 million for the 3 months ended March 31, 2020. General and administrative expenses have decreased by $0.4 million when compared to the second quarter of 2019 to $1.7 million for the 3 months ended March 31, 2020. The reduction is primarily related to a reduction in stock option compensation charges. Our cash position at March 31, 2020, was $26.6 million compared to $22.2 million at September 30, 2019, our fiscal year-end. Thank you. And now I will turn the call back over to Christopher. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [5] -------------------------------------------------------------------------------- Thank you, Sandra. In summary, despite these challenging times, we continue to make steady progress towards reaching several important milestones, and we are poised for an exciting time ahead with multiple data readouts. We look forward to providing further updates as advancements continue. I would like now to open the call for questions. Operator, please go ahead. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question comes from Raghuram Selvaraju from H.C. Wainwright. -------------------------------------------------------------------------------- Blair Daniel Cohen, H.C. Wainwright & Co, LLC, Research Division - Associate [2] -------------------------------------------------------------------------------- This is Blair Cohen on for Ram. A few questions for you. First, are you concerned in any way about possible data compromise in any of your ongoing trials that are being modified due to COVID-19? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [3] -------------------------------------------------------------------------------- The advantage of our trial is that there is 2 questions to the -- to assessment of the physician -- by the physician and directly towards the patient and also questions towards the caregiver. And these questions are very the same if you would do it in person or if you would do it over your video, or Webex function or over telephone. The other point I'd like to make that in Parkinson’s disease dementia, the assessment is done over an objective computer-based assessment, which is also not dependent on the interaction or the interface of the interaction. So I would say that it certainly cannot exclude it that there is an effect of a virtual assessment versus in personal assessment. But the way these questionnaires and assessments are performed, it would not be differently performed in person or over an interface like video or Webex -- video or over the telephone. -------------------------------------------------------------------------------- Blair Daniel Cohen, H.C. Wainwright & Co, LLC, Research Division - Associate [4] -------------------------------------------------------------------------------- Okay. And what are your thoughts on the recently reported sarizotan failure in Rett syndrome in the STARS trial? And what implications that this have for blarcamesine? And what is, clearly, the competitive landscape? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [5] -------------------------------------------------------------------------------- So we are obviously aware of this program. And it's unfortunate for the patient population. However, we also understand, though, that this program had a narrower focus on the outcome measures. It was focused on respiration function and not looking at the broader phenotype of Rett syndrome, which includes the entire behavioral scale like hand movement overall, physical agility as well as seizures and sleep paradigm and other behavioral interactions. So we obviously are not directly affected by this, and it shows that this is an unmet need, and we continue obviously to progress our program in order to hopefully be able to provide an improvement for this population. -------------------------------------------------------------------------------- Blair Daniel Cohen, H.C. Wainwright & Co, LLC, Research Division - Associate [6] -------------------------------------------------------------------------------- Perfect. What would you consider a slam dunk result from the Phase II trial in Parkinson's dementia? And would you plan to hold an end of Phase II meeting with the FDA on the basis of this data, assuming success? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [7] -------------------------------------------------------------------------------- So the answer to the last question is we would obviously hold a meeting depending on the outcome. And regarding the first question, I would rather like to have the data speak for itself since we don't have any preconceived outcome expectation since this is the very first study in Parkinson's disease dementia with our drug. So it's hard for us to formulate any scenario. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- (Operator Instructions) Our next question is from Tom Bishop from BI Research. -------------------------------------------------------------------------------- Tom Bishop, BI Research [9] -------------------------------------------------------------------------------- At last report, the company indicated they'd hope to add a number of sites like going from 15 to 45, and I was just wondering -- and presumably outside of Australia. And I was just wondering how that was going in this environment? I heard you mentioned Europe, I thought, at one point. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [10] -------------------------------------------------------------------------------- That's right. Europe and North America, and that is the plan. And we are ramping up, we are actually in the process of executing and adding sites. We are obviously also aware though that these countries have been affected by COVID in respective ways. Nevertheless, the regulatory process of approving a study seems to be not affected by that. And we are not -- we don't have any delay at this moment, but we will find out, if in several months or in the next quarter, when we received approval in the respective countries, how the situation will evolve in regards to each countries in Europe, in North America, how they basically will be able to address clinical visits. At the same time, because we learned from the situation, we already included in this protocol submission, this ability of doing visits, virtual visits as well as home visits for the patients. So we can still be able to move in a parallel trajectory in this alternative scenario. If so, the stay home situation gets expanded in Europe and America. So we believe we can -- we've done everything possible to derisk the situation. And obviously, nobody can anticipate and see what will happen regarding to COVID in the future. -------------------------------------------------------------------------------- Tom Bishop, BI Research [11] -------------------------------------------------------------------------------- Okay. So I would think that you haven't actually opened any additional sites yet, but you're working full steam on it. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [12] -------------------------------------------------------------------------------- That's exactly right. Yes. -------------------------------------------------------------------------------- Tom Bishop, BI Research [13] -------------------------------------------------------------------------------- Okay. So meanwhile, has enrollment -- I know last time you said that you had gotten to 50%. And this time, you said pretty much still 50% plus. Does that mean there haven't been a whole lot of enrollments in this pandemic climate? Or are you just kind of going to say 50% until you get to 100%, 50% plus? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [14] -------------------------------------------------------------------------------- Yes, if I might comment to this, we announced 50% enrollment for the Alzheimer’s study for the Phase IIb/III. So we are now, today, beyond -- way beyond 50%. What we announced today was that the 2 Rett syndrome studies have also surpassed and are beyond, I want to point that out, beyond 50%. So that is basically 2 different -- or 3 different studies, so they should not be mixed up. -------------------------------------------------------------------------------- Tom Bishop, BI Research [15] -------------------------------------------------------------------------------- Is there also a third Rett trial that has not yet begun? Or... -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [16] -------------------------------------------------------------------------------- That's right. So the Rett syndrome study, RS-003, where we have been getting approval to start. We have made some additional amendment. And for that reason, the first patient has not yet initiated, but this is forthcoming as we speak. -------------------------------------------------------------------------------- Tom Bishop, BI Research [17] -------------------------------------------------------------------------------- Okay. And from time to time, I get a subscriber that says that he's concerned that there hasn't been any insider buying. And I've told him, well, you guys often know too much. And maybe it wouldn't be a good idea to buy or it's -- you're in a quiet period anyway. And there's not that many insiders, but could you comment to that? Because I get the question a fair amount. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [18] -------------------------------------------------------------------------------- So I have shown personally to be active in buying on the open market in the past. And it's -- I would not interpret nonbuying as a single one way or the other. And as you said, it's also not possible to speak about it, and I can't even say that we can -- to speculate this that there are moments where you cannot buy any more because you know certain things. So I would not bring this to the forefront. I would just leave it like that we are very excited about all our programs. The Alzheimer’s study, it's very exciting that we are moving forward and we're rolling very nicely, actually, in Australia. The Parkinson’s disease study because it's really around the corner, and it's going to be data announced very soon. And 2 Rett studies, and [that's actually] starting soon as well. We're very excited about all our programs. I'd also like to mention that the ANAVEX 3-71 study, which we had announced that we plan also for moving into Phase I. This is also something we are looking forward to this year. -------------------------------------------------------------------------------- Tom Bishop, BI Research [19] -------------------------------------------------------------------------------- Okay. And one last question on the financial side. I saw something about -- well, I know you have a deal with Lincoln Park and kind of ATM. And then there's Cantor Fitzgerald and now I see Leerink, and I'm a little confused if those are 2 different programs? Or they're basically all programs that you're using to stay funded. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [20] -------------------------------------------------------------------------------- So the major contribution for funding was, in the past, the Lincoln Park. We call it a purchase agreement where we are able, from time to time, if we like the stock price levels. And our burn rate is not so big, and our volume is very easily able to absorb that to just are able to keep the cash position relatively constant over -- quarter-over-quarter, as you can see. The ATM with Cantor Fitzgerald, we're very excited that we were able to add now to this agreement with Leerink. And that is basically just an amendment of the existing program with Cantor to add Leerink. But it's not a different program, it's exactly the same. We're just adding Leerink to this program -- to this ATM program, which we have not used yet. And we regard this program as a safety net if we are not able to find alternatives to fund, but we have not used this program. -------------------------------------------------------------------------------- Tom Bishop, BI Research [21] -------------------------------------------------------------------------------- Now Lincoln Park, that is also an ATM at the market? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [22] -------------------------------------------------------------------------------- It's called purchase agreement. It has a different name, but the principle is the same. We are selling some shares, and Lincoln Park has to buy it, and we get the money in return. -------------------------------------------------------------------------------- Tom Bishop, BI Research [23] -------------------------------------------------------------------------------- Right. But it's pretty much the same thing with Cantor and Leerink, but you just have a number of options all ongoing at once? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [24] -------------------------------------------------------------------------------- That's right. It increases the ability of being able to access capital. That's what -- it is just common good fiscal responsibility to be able not to be put under pressure or being limited in the option to be able to access capital since you know that, as a biotech company, you don't have revenues. And if you don't have revenues, you don't have operating profits to absorb existing costs. So you have to be flexible and have the options open. -------------------------------------------------------------------------------- Tom Bishop, BI Research [25] -------------------------------------------------------------------------------- And what was the burn rate? You mentioned that, but I didn't hear anybody say what... -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [26] -------------------------------------------------------------------------------- No. So we've seen in the past very much in the range of $1 million to $1.5 million, and we are pretty much -- maybe a little bit higher in the last 2 quarters in this range of $1.5 million to $1.7 million, $1.8 million a month of burn rate. -------------------------------------------------------------------------------- Tom Bishop, BI Research [27] -------------------------------------------------------------------------------- Per month? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [28] -------------------------------------------------------------------------------- Per month. Yes. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- And our next question comes from Jason Kolbert from Dawson James. -------------------------------------------------------------------------------- Unidentified Analyst, [30] -------------------------------------------------------------------------------- This is Alex for Jason. And I think you did a good job talking about how you guys are dealing with COVID-19 and how that's affecting you. But I think it would be great if you can go into more detail or -- about the catalyst in the upcoming quarter for you guys? -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [31] -------------------------------------------------------------------------------- So the upcoming quarter will be an announcement of top line data of the Phase II Parkinson's disease dementia study. That is really something we can put on everybody's calendar because the trial has been enrolled the last patient. And we now have to wait for the 14 days -- 14 weeks, which is the duration of the study, plus the times needed to -- for the independent research CRO to build the results. And then we will update the data in a public announcement, the top line lever, which will be mid of 2020. And we will update the other study, the Rett syndrome studies. We will update the enrollment completion. And then it's also relatively easy then to predict the expected top line data period of time given that we know how long the trial duration is plus some time needed for the calculation. -------------------------------------------------------------------------------- Operator [32] -------------------------------------------------------------------------------- And that concludes today's question-and-answer session. I'll turn the call back over to Christopher. -------------------------------------------------------------------------------- Christopher U. Missling, Anavex Life Sciences Corp. - Chairman, President, CEO & Secretary [33] -------------------------------------------------------------------------------- Thank you all for participating in today's conference call. Should you need additional information or have any other questions, please visit our website at www.anavex.com or call or e-mail us. This concludes our remarks for today. Operator? -------------------------------------------------------------------------------- Operator [34] -------------------------------------------------------------------------------- Thank you, ladies and gentlemen. This concludes your call today, you may now disconnect.