ITEM
1. FINANCIAL STATEMENTS
Anavex Life Sciences Corp.
Interim Condensed Consolidated Financial Statements
June 30, 2022
(Unaudited)
Anavex
Life Sciences Corp. |
Interim
Condensed Consolidated Balance Sheets |
As
at June 30, 2022 and September 30, 2021 |
(Unaudited) |
|
|
| | | |
| | |
|
|
June 30,
2022 | |
September 30, 2021 |
|
|
| |
|
Assets |
|
| | | |
| | |
Current assets |
|
| | | |
| | |
Cash and cash equivalents |
|
$ | 153,199,352 | | |
$ | 152,107,745 | |
Incentive and tax receivables |
|
| 6,559,829 | | |
| 9,136,831 | |
Prepaid expenses and other current assets |
|
| 461,963 | | |
| 371,914 | |
Total assets |
|
$ | 160,221,144 | | |
$ | 161,616,490 | |
|
|
| | | |
| | |
Liabilities and stockholders' equity |
|
| | | |
| | |
Current Liabilities |
|
| | | |
| | |
Accounts payable |
|
$ | 3,126,892 | | |
$ | 4,739,781 | |
Accrued liabilities (Note 4) |
|
| 5,913,821 | | |
| 5,614,774 | |
Deferred grant income |
|
| 443,831 | | |
| 443,831 | |
Total liabilities |
|
| 9,484,544 | | |
| 10,798,386 | |
|
|
| | | |
| | |
Commitments and Contingencies - Note 6 |
|
| | | |
| | |
Stockholders' equity |
|
| | | |
| | |
Capital stock |
|
| | | |
| | |
Authorized: |
|
| | | |
| | |
10,000,000 preferred stock, par value $0.001 per share |
|
| - | | |
| - | |
200,000,000 common stock, par value $0.001 per share |
|
| | | |
| | |
Issued and outstanding: |
|
| | | |
| | |
77,942,568 common shares |
|
| | | |
| | |
(September 30, 2021 - 75,918,465) |
|
| 77,944 | | |
| 75,920 | |
Additional paid-in capital |
|
| 381,932,039 | | |
| 348,328,048 | |
Accumulated deficit |
|
| (231,273,383 | ) | |
| (197,585,864 | ) |
Total stockholders' equity |
|
| 150,736,600 | | |
| 150,818,104 | |
Total liabilities and stockholders' equity |
|
$ | 160,221,144 | | |
$ | 161,616,490 | |
See
Accompanying Notes to Condensed Consolidated Interim Financial Statements
Anavex
Life Sciences Corp. |
Interim
Condensed Consolidated |
Statements
of Operations and Comprehensive Loss |
For
the three and nine months ended June 30, 2022 and 2021 |
(Unaudited) |
| |
| | | |
| | | |
| | | |
| | |
| |
Three months ended June 30, | |
Nine months ended June 30, |
| |
2022 | |
2021 | |
2022 | |
2021 |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
General and administrative | |
$ | 3,185,451 | | |
$ | 2,434,127 | | |
$ | 9,167,560 | | |
$ | 6,138,528 | |
Research and development | |
| 9,273,269 | | |
| 8,964,528 | | |
| 26,534,297 | | |
| 23,610,888 | |
Total operating expenses | |
| (12,458,720 | ) | |
| (11,398,655 | ) | |
| (35,701,857 | ) | |
| (29,749,416 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expenses) | |
| | | |
| | | |
| | | |
| | |
Grant income | |
| — | | |
| 43,280 | | |
| — | | |
| 54,100 | |
Research and development incentive income | |
| 682,432 | | |
| 1,363,661 | | |
| 2,328,675 | | |
| 3,593,856 | |
Interest income, net | |
| 229,917 | | |
| 11,453 | | |
| 242,405 | | |
| 19,110 | |
Foreign exchange(loss) gain, net | |
| (732,549 | ) | |
| (160,880 | ) | |
| (408,541 | ) | |
| 17,191 | |
Total other income, net | |
| 179,800 | | |
| 1,257,514 | | |
| 2,162,539 | | |
| 3,684,257 | |
| |
| | | |
| | | |
| | | |
| | |
Income tax expense, current | |
| (88,421 | ) | |
| (39,000 | ) | |
| (148,201 | ) | |
| (125,269 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss and comprehensive loss | |
$ | (12,367,341 | ) | |
$ | (10,180,141 | ) | |
$ | (33,687,519 | ) | |
$ | (26,190,428 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net Loss per share | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
$ | (0.16 | ) | |
$ | (0.14 | ) | |
$ | (0.44 | ) | |
$ | (0.39 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares outstanding | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
| 77,442,236 | | |
| 70,589,651 | | |
| 76,561,940 | | |
| 67,810,774 | |
See Accompanying Notes to Condensed
Consolidated Interim Financial Statements
Anavex
Life Sciences Corp. |
Interim
Condensed Consolidated Statement of Changes in Stockholders' Equity |
For
the three months ended June 30, 2022 and 2021 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock |
|
|
|
|
|
|
|
|
Additional |
|
Share |
|
|
|
|
|
|
|
|
|
|
Paid-in |
|
proceeds |
|
Accumulated |
|
|
|
|
Shares |
|
Par
Value |
|
Capital |
|
Receivable |
|
Deficit |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
April 1, 2022 |
|
|
77,161,688 |
|
|
|
77,163 |
|
|
|
371,437,616 |
|
|
$ |
(403,696 |
) |
|
$ |
(218,906,042 |
) |
|
|
152,205,041 |
|
Shares
issued under Sales Agreement |
|
|
557,177 |
|
|
|
557 |
|
|
|
6,178,127 |
|
|
|
403,696 |
|
|
|
— |
|
|
|
6,582,380 |
|
Less:
share issue costs |
|
|
— |
|
|
|
— |
|
|
|
(185,361 |
) |
|
|
— |
|
|
|
— |
|
|
|
(185,361 |
) |
Shares
issued pursuant to exercise of stock options |
|
|
223,703 |
|
|
|
224 |
|
|
|
513,043 |
|
|
|
— |
|
|
|
— |
|
|
|
513,267 |
|
Stock
based compensation |
|
|
— |
|
|
|
— |
|
|
|
3,988,614 |
|
|
|
— |
|
|
|
— |
|
|
|
3,988,614 |
|
Net
loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,367,341 |
) |
|
|
(12,367,341 |
) |
Balance,
June 30, 2022 |
|
|
77,942,568 |
|
|
$ |
77,944 |
|
|
$ |
381,932,039 |
|
|
$ |
— |
|
|
$ |
(231,273,383 |
) |
|
$ |
150,736,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
April 1, 2021 |
|
|
70,030,620 |
|
|
$ |
70,032 |
|
|
$ |
251,427,781 |
|
|
|
— |
|
|
$ |
(175,687,517 |
) |
|
$ |
75,810,296 |
|
Shares
issued under Sales Agreement, net of share issue costs |
|
|
2,082,263 |
|
|
|
2,082 |
|
|
|
41,282,225 |
|
|
|
— |
|
|
|
— |
|
|
|
41,284,307 |
|
Less:
share issue costs |
|
|
— |
|
|
|
— |
|
|
|
(1,302,826 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,302,826 |
) |
Shares
issued pursuant to registered direct offering, net of share issuance costs |
|
|
2,380,953 |
|
|
|
2,381 |
|
|
|
49,997,619 |
|
|
|
— |
|
|
|
— |
|
|
|
50,000,000 |
|
Less:
share issue costs |
|
|
— |
|
|
|
— |
|
|
|
(3,095,938 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,095,938 |
) |
Shares
issued upon exercise of options |
|
|
305,997 |
|
|
|
306 |
|
|
|
869,300 |
|
|
|
— |
|
|
|
— |
|
|
|
869,606 |
|
Shares
issued pursuant to exercise of warrants |
|
|
350,000 |
|
|
|
350 |
|
|
|
1,466,150 |
|
|
|
— |
|
|
|
— |
|
|
|
1,466,500 |
|
Stock
based compensation |
|
|
— |
|
|
|
— |
|
|
|
2,293,925 |
|
|
|
— |
|
|
|
— |
|
|
|
2,293,925 |
|
Net
loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,180,141 |
) |
|
|
(10,180,141 |
) |
Balance,
June 30, 2021 |
|
|
75,149,833 |
|
|
$ |
75,151 |
|
|
$ |
342,938,236 |
|
|
$ |
— |
|
|
$ |
(185,867,658 |
) |
|
$ |
157,145,729 |
|
See Accompanying Notes to Condensed
Consolidated Interim Financial Statements
Anavex
Life Sciences Corp. |
Interim
Condensed Consolidated Statement of Changes in Stockholders' Equity |
For
the nine months ended June 30, 2022 and 2021 |
(Unaudited) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
Common Stock | |
| |
|
| |
| |
| |
Additional | |
| |
|
| |
| |
| |
Paid-in | |
Accumulated | |
|
| |
Shares | |
Par Value | |
Capital | |
Deficit | |
Total |
Balance, October 1, 2021 | |
| 75,918,465 | | |
$ | 75,920 | | |
$ | 348,328,048 | | |
$ | (197,585,864 | ) | |
$ | 150,818,104 | |
Shares issued under Sales Agreement | |
| 1,623,566 | | |
| 1,623 | | |
| 20,980,525 | | |
| — | | |
| 20,982,148 | |
Less: share issue costs | |
| — | | |
| — | | |
| (723,167 | ) | |
| — | | |
| (723,167 | ) |
Shares issued upon exercise of stock options | |
| 400,537 | | |
| 401 | | |
| 1,009,789 | | |
| — | | |
| 1,010,190 | |
Stock based compensation | |
| — | | |
| — | | |
| 12,336,844 | | |
| — | | |
| 12,336,844 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (33,687,519 | ) | |
| (33,687,519 | ) |
Balance, June 30, 2022 | |
| 77,942,568 | | |
$ | 77,944 | | |
$ | 381,932,039 | | |
$ | (231,273,383 | ) | |
$ | 150,736,600 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, October 1, 2020 | |
| 62,045,198 | | |
$ | 62,047 | | |
$ | 186,851,752 | | |
$ | (159,677,230 | ) | |
$ | 27,236,569 | |
Shares issued under 2019 Purchase Agreement | |
| | | |
| | | |
| | | |
| | | |
| | |
Purchase shares | |
| 4,007,996 | | |
| 4,008 | | |
| 24,107,190 | | |
| — | | |
| 24,111,198 | |
Commitment shares | |
| 78,213 | | |
| 78 | | |
| (78 | ) | |
| — | | |
| — | |
Shares issued under Sales Agreement | |
| 5,634,576 | | |
| 5,634 | | |
| 79,101,914 | | |
| — | | |
| 79,107,548 | |
Less: share issue costs | |
| — | | |
| — | | |
| (2,437,523 | ) | |
| — | | |
| (2,437,523 | ) |
Shares issued pursuant to registered direct offering, net of share issuance costs |
|
|
2,380,953 |
|
|
|
2,381 |
|
|
|
49,997,619 |
|
|
|
— |
|
|
|
50,000,000 |
|
Less: share issue costs | |
| — | | |
| — | | |
| (3,095,938 | ) | |
| — | | |
| (3,095,938 | ) |
Shares issued upon exercise of options | |
| 652,897 | | |
| 653 | | |
| 1,867,755 | | |
| — | | |
| 1,868,408 | |
Shares issued pursuant to exercise of warrants | |
| 350,000 | | |
| 350 | | |
| 1,466,150 | | |
| — | | |
| 1,466,500 | |
Stock based compensation | |
| — | | |
| — | | |
| 5,079,395 | | |
| — | | |
| 5,079,395 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (26,190,428 | ) | |
| (26,190,428 | ) |
Balance, June 30, 2021 | |
| 75,149,833 | | |
$ | 75,151 | | |
$ | 342,938,236 | | |
$ | (185,867,658 | ) | |
$ | 157,145,729 | |
See Accompanying Notes to Condensed
Consolidated Interim Financial Statements
Anavex
Life Sciences Corp. |
Interim
Condensed Consolidated Statements of Cash Flows |
For
the nine months ended June 30, 2022 and 2021 |
(Unaudited) |
| |
| | | |
| | |
| |
2022 | |
2021 |
| |
| |
|
Cash flows used in operating activities | |
| | | |
| | |
Net loss | |
$ | (33,687,519 | ) | |
$ | (26,190,428 | ) |
Adjustments to reconcile net loss to net cash used in operations: | |
| | | |
| | |
Stock-based compensation | |
| 12,336,844 | | |
| 5,079,395 | |
Changes in working capital balances: | |
| | | |
| | |
Incentive and tax receivables | |
| 2,577,002 | | |
| (3,751,918 | ) |
Prepaid expenses and other current assets | |
| (106,414 | ) | |
| 185,641 | |
Accounts payable | |
| (1,612,889 | ) | |
| 187,653 | |
Accrued liabilities | |
| 299,047 | | |
| 1,336,660 | |
Deferred grant income | |
| — | | |
| 443,831 | |
Net cash used in operating activities | |
| (20,193,929 | ) | |
| (22,709,166 | ) |
| |
| | | |
| | |
Cash flows provided by financing activities | |
| | | |
| | |
Issuance of common shares | |
| 20,982,148 | | |
| 153,218,746 | |
Share issue costs | |
| (706,802 | ) | |
| (5,533,461 | ) |
Proceeds from exercise of warrants | |
| — | | |
| 1,466,500 | |
Proceeds from exercise of stock options | |
| 1,010,190 | | |
| 1,868,408 | |
Net cash provided by financing activities | |
| 21,285,536 | | |
| 151,020,193 | |
| |
| | | |
| | |
Increase in cash and cash equivalents during the period | |
| 1,091,607 | | |
| 128,311,027 | |
Cash and cash equivalents, beginning of
period | |
| 152,107,745 | | |
| 29,249,018 | |
Cash and cash equivalents, end of period | |
$ | 153,199,352 | | |
$ | 157,560,045 | |
| |
| | | |
| | |
Supplemental Cash Flow Information | |
| | | |
| | |
Cash paid for state and local minimum
income taxes | |
$ | 141,374 | | |
$ | 98,281 | |
See Accompanying Notes to Condensed
Consolidated Interim Financial Statements
Anavex
Life Sciences Corp.
Notes
to the Condensed Consolidated Interim Financial Statements
June
30, 2022
(Unaudited)
Note 1 Description
of Business and Basis of Presentation
Description
of Business
Anavex
Life Sciences Corp. (“Anavex” or the “Company”) is a clinical stage biopharmaceutical company engaged in the
development of differentiated therapeutics by applying precision medicine to central nervous system (“CNS”) diseases with
high unmet need. Anavex analyzes genomic data from clinical studies to identify biomarkers, which are used to select patients that will
receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental diseases. The Company’s lead compound
ANAVEX®2-73 is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central
nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations
in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).
Basis
of Presentation
These
unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S.
GAAP”) for interim reporting. Accordingly, certain information and note disclosures normally included in the annual financial statements
in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the
disclosures are adequate to make the information presented not misleading.
These
accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments,
which in the opinion of management are necessary for fair presentation of the information contained herein. The consolidated balance
sheet as of September 30, 2021 was derived from the audited annual financial statements but does not include all disclosures required
by U.S. GAAP. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended September
30, 2021 filed with the SEC on November 24, 2021. The Company follows the same accounting policies in the preparation of interim reports.
Operating
results for the three and nine months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the
year ending September 30, 2022.
Liquidity
All
of the Company’s potential drug compounds are in the clinical development stage and the Company cannot be certain that its research
and development efforts will be successful or, if successful, that its potential drug compounds will ever be approved for sales to pharmaceutical
companies or generate commercial revenues. To date, we have not generated any revenues from our operations. The Company expects the business
to continue to experience negative cash flows from operations for the foreseeable future and cannot predict when, if ever, our business
might become profitable.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited
Note
1 Description of Business and Basis of Presentation – (Continued)
Liquidity
– (Continued)
Management
believes that the current working capital position will be sufficient to meet the Company’s working capital requirements beyond
the next 12 months after the date that these interim condensed consolidated financial statements are issued. The process of drug development
can be costly, and the timing and outcomes of clinical trials is uncertain. The assumptions upon which the Company has based its
estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary
depending upon a number of factors including but not limited to the design, timing and duration of future clinical trials, the progress
of the Company’s research and development programs and the level of financial resources available. The Company has the ability
to adjust its operating plan spending levels based on the timing of future clinical trials.
Other
than our rights related to the Sales Agreement (as defined below in Note 5), there can be no assurance that additional financing will
be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able
to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all
of its research and development activities.
Use
of Estimates
The
preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in
the reporting period. The Company regularly evaluates estimates and assumptions related to accounting for research and development costs,
incentive income receivable, valuation and recoverability of deferred tax assets, asset impairment, stock-based compensation, and loss
contingencies. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors, including
the potential future effects of COVID-19, that it believes to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.
To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
1 Description of Business and Basis of Presentation – (Continued)
Principles
of Consolidation
These
consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiaries, Anavex Australia
Pty Limited. (“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated
under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada. All inter-company
transactions and balances have been eliminated.
Fair
Value Measurements
The
fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable,
that may be used to measure fair value which are the following:
Level
1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level
2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose
significant value drivers are observable; and
Level
3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant
to the fair value of the assets or liabilities.
At
June 30, 2022 and September 30, 2021, the Company did not have any Level 3 assets or liabilities.
Basic
and Diluted Loss per Share
Basic
income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted income/(loss) per common share is computed by dividing net income/(loss) available
to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive
effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect of other potentially
dilutive securities. For purposes of the diluted net loss per share calculation, options and warrants are potentially dilutive securities
and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.
As
of June 30, 2022, loss per share excludes 13,194,616 (September 30, 2021 – 11,540,903) potentially dilutive common shares related
to outstanding options and warrants, as their effect was anti-dilutive.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
2 Recent Accounting Pronouncements
Recently
Adopted Accounting Pronouncements
Effective
October 1, 2021, the Company adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes (ASC 740)”, which is intended
to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic
740 and clarifying and amending existing guidance to improve consistent application. There was no material impact on the Company’s
operations, financial condition, or cash flows.
Note
3 Other Income
Grant Income
During
the year ended September 30, 2021, the Company received $497,931 of a $995,862 research grant awarded by the Michael J. Fox Foundation
for Parkinson’s Research. The grant will be used to fund a clinical trial of the Company’s lead compound, ANAVEX®2-73
related to Parkinson’s disease.
The
grant income is being deferred when received and amortized to other income as the related research and development expenditures are incurred.
During the three and nine months ended June 30, 2022, the Company did not recognize any of this grant on its statements of operations
(2021: $43,280 and $54,100 respectively). At June 30, 2022, an amount of $443,831 (September 30, 2021: $443,831) of this grant is recorded
as deferred grant income, representing the amount of this grant which has not yet been amortized to other income. The Company will recognize
this income on its statement of operations as the relating expenditures are incurred to offset the income.
Research
and development incentive income
Research
and development incentive income represents the receipt by Anavex Australia, of the Australian research and development incentive credit,
(the “R&D Incentive Credit”).
During
the three and nine months ended June 30, 2022 the Company recorded research and development incentive income of $682,432 (AUD 954,986)
and $2,328,675 (AUD 3,218,303) (2021: $1,363,661 (AUD 1,770,444) and $3,593,856 (AUD 4,750,539)), respectively, related to the R&D
Incentive Credit for eligible research and development expenses incurred during the period.
Note
4 Accrued liabilities
The
principal components of accrued liabilities consists of:
Schedule of Accrued Liabilities | |
| | | |
| | |
| |
June 30, | |
September 30, |
| |
2022 | |
2021 |
Clinical site costs and patient visits | |
| 2,138,505 | | |
| 2,035,800 | |
Accrued compensation and benefits | |
| 889,616 | | |
| 1,201,903 | |
Fixed contract accruals | |
| 334,887 | | |
| 649,649 | |
Accrued license fees payables | |
| 500,000 | | |
| — | |
All other accrued liabilities | |
| 2,050,813 | | |
| 1,727,422 | |
Total accrued liabilities | |
| 5,913,821 | | |
| 5,614,774 | |
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
5 Equity Offerings
Common
Stock
Common
shares are voting and are entitled to dividends as declared at the discretion of the Board of Directors (the “Board”).
Preferred
Stock
The
Company’s Board has the authority to issue preferred stock in one or more series and to fix the rights, preferences, privileges,
restrictions and the number of shares constituting any series of the designation of the series.
Sales
Agreement
The
Company entered into a Controlled Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the
“Sales Agreement”) with Cantor Fitzgerald & Co. and SVB Leerink LLC (together the “Sales Agents”), pursuant
to which the Company may offer and sell shares of common stock registered under an effective registration statement from time to time
through the Sales Agents (the “Offering”).
Upon
delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the Sales Agreement,
the Sales Agents may sell the Shares by methods deemed to be an “at the market offering” offering, in negotiated transactions
at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted
by law, including negotiated transactions, subject to the prior written consent of the Company. The Company is not obligated to make
any sales of Shares under the Sales Agreement. The Company or Sales Agents may suspend or terminate the offering of Shares upon notice
to the other party, subject to certain conditions. The Sales Agents will act as agent on a commercially reasonable efforts basis
consistent with their normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of
Nasdaq.
The
Company has agreed to pay the Sales Agents commissions for their services of up to 3.0% of the gross proceeds from the sale of the Shares
pursuant to the Sales Agreement. The Company also agreed to provide the Sales Agents with customary indemnification and contribution
rights. During the nine months ended June 30, 2022, 1,623,566 shares were sold pursuant to the Offering for gross proceeds of $20,982,148
(net proceeds of $20,258,981 after deducting offering expenses) (2021: 5,634,576 shares were sold for gross proceeds of $79,107,548 (net
proceeds of $76,670,025 after deducting offering expenses)). At June 30, 2022, an amount of $142,410,402 (September 30, 2021: $163,392,550)
was registered pursuant to an effective registration statement and remained available to be sold under the Sales Agreement.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
5 Equity Offerings – (continued)
2019
Purchase Agreement
On
June 7, 2019, the Company entered into a $50,000,000 purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park,
as amended on July 1, 2020, pursuant to which the Company had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated
to purchase, up to $50,000,000 in value of its shares of common stock from time to time over a three-year period until July 1, 2022.
In
consideration for entering into the 2019 Purchase Agreement, the Company issued to Lincoln Park 324,383 shares of common stock as a commitment
fee during the year ended September 30, 2019 and agreed to issue up to 162,191 shares pro rata, when and if, Lincoln Park purchased,
at the Company’s discretion, the $50,000,000 aggregate commitment.
At
June 30, 2022 and September 30, 2021, no shares remained available for issuance under the 2019 Purchase Agreement. During the nine months
ended June 30, 2021, the Company issued to Lincoln Park an aggregate of 4,086,209 shares of common stock including 4,007,996 shares of
common stock for an aggregate purchase price of $24,111,198 and 78,213 commitment shares.
Note
6 Commitments and Contingencies
During
the three and nine months ended June 30, 2022, the Company incurred office lease expense of $21,015 and $42,348 (2021: $18,994 and $117,284),
respectively.
| b) | Employee
401(k) Benefit Plan |
The
Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers all United States
based employees. United States based employees eligible to participate in the plan may contribute up to the current statutory limits
under the Internal Revenue Service regulations. The 401(k) plan permits the Company to make additional matching contributions on behalf
of contributing employees. During the three and nine months ended June 30, 2022, the Company made $27,358 and $120,979 (2021: $28,221
and $102,261), respectively, in matching contributions under the 401(k) plan.
The
Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain,
and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of
any such matter will not have a material adverse effect upon the Company's consolidated financial statements. The Company does not believe
that any of such pending claims and legal proceedings will have a material
adverse effect on its consolidated financial statements.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
6 Commitments and Contingencies – (Continued)
| d) | Share
Purchase Warrants |
A
summary of the status of the Company’s outstanding share purchase warrants is presented below:
Schedule of exercisable share purchase warrants outstanding | | |
| | | |
| | |
| |
| |
Weighted |
| |
| |
Average |
| |
Number of | |
Exercise Price |
| |
Shares | |
($) |
Balance,
September 30, 2020 | | |
| 500,000 | | |
| 3.88 | |
Granted | | |
| 60,000 | | |
| 12.00 | |
Exercised | | |
| (350,000 | ) | |
| 4.19 | |
Balance,
September 30, 2021 | | |
| 210,000 | | |
| 5.69 | |
Forfeited | | |
| (50,000 | ) | |
| 12.00 | |
Balance,
June 30, 2022 | | |
| 160,000 | | |
| 3.72 | |
At
June 30, 2022, the Company had share purchase warrants outstanding as follows
Schedule of share purchase warrants outstanding | |
| | | |
|
Number | |
Exercise Price | |
Expiry Date |
150,000 | |
$ | 3.17 | | |
May 6, 2024 |
10,000 | |
$ | 12.00 | | |
April 21, 2026 |
160,000 | |
| | | |
|
| e) | Stock–based
Compensation Plan |
2015
Stock Option Plan
On
September 18, 2015, the Company’s Board approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided for
the grant of stock options and restricted stock awards to directors, officers, employees and consultants of the Company.
The
maximum number of our common shares reserved for issue under the plan was 6,050,553 shares, subject to adjustment in the event of a change
of the Company’s capitalization.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
6 Commitments and Contingencies – (Continued)
| e) | Stock-based
Compensation Plan – (Continued) |
2019
Stock Option Plan
On
January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock
options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company.
The
maximum number of our common shares reserved for issue under the plan was 6,000,000 shares, subject to adjustment in the event of a change
of the Company’s capitalization.
During
the nine months ended June 30, 2022, 406,453 options previously available under the 2019 Plan and the 2015 Plan became available under
the 2022 Plan (as defined below).
2022
Stock Option Plan
On
March 25, 2022, the Board approved the 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2022 Plan was approved by stockholders
on May 24, 2022. Under the terms of the 2022 Plan, 10,000,000 additional shares of Common Stock will be available for issuance under
the plan, in addition to the shares available under the 2019 Plan and the 2015 Plan. Any awards outstanding under a previous stock option
plan will remain subject to and be paid under such plan, and any shares subject to outstanding awards under a previous plan that subsequently
cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for
issuance under the 2022 Plan.
The
2022 Plan provides that it may be administered by the Board, or the Board may delegate such responsibility to a committee. The exercise
price will be determined by the Board at the time of grant shall be at least equal to the fair market value on such date. If the grantee
is a 10% stockholder on the grant date, then the exercise price shall not be less than 110% of fair market value of the Company’s
shares of common stock on the grant date. Stock options may be granted under the 2022 Plan for an exercise period of up to ten years
from the date of grant of the option or such lesser periods as may be determined by the Board, subject to earlier termination in accordance
with the terms of the 2022 Plan. At June 30, 2022, 1,298,000 options had been issued under the 2022 Plan and 9,108,453 options were available
for issue under the 2022 Plan, subject to stockholder approval.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
6 Commitments and Contingencies – (Continued)
| e) | Stock-based
Compensation Plan – (Continued) |
A
summary of the status of Company’s outstanding stock options is presented below:
Schedule of outstanding stock purchase options | | |
| | | |
| | | |
| | | |
| | |
| |
| |
Weighted | |
| |
|
| |
| |
Average | |
Weighted Average | |
Aggregate |
| |
Number of | |
Exercise Price | |
Grant Date Fair Value | |
intrinsic value |
| |
Shares | |
($) | |
($) | |
($) |
Outstanding,
September 30, 2020 | | |
| 10,076,266 | | |
| 3.48 | | |
| | | |
| 14,982,581 | |
Granted | | |
| 2,732,000 | | |
| 12.55 | | |
| 9.32 | | |
| | |
Forfeited | | |
| (55,834 | ) | |
| 3.04 | | |
| 2.43 | | |
| | |
Exercised | | |
| (1,421,529 | ) | |
| 2.89 | | |
| 2.43 | | |
| 24,446,305 | |
Outstanding,
September 30, 2021 | | |
| 11,330,903 | | |
| 5.74 | | |
| | | |
| 140,132,451 | |
Granted | | |
| 2,208,000 | | |
| 10.07 | | |
| 6.99 | | |
| | |
Forfeited | | |
| (103,750 | ) | |
| 5.39 | | |
| 4.04 | | |
| | |
Exercised | | |
| (400,537 | ) | |
| 2.52 | | |
| 1.88 | | |
| | |
Outstanding,
June 30, 2022 | | |
| 13,034,616 | | |
| 6.57 | | |
| | | |
| 58,809,090 | |
Exercisable,
June 30, 2022 | | |
| 8,562,530 | | |
| 4.11 | | |
| | | |
| 52,439,132 | |
The
following summarizes information about stock options at June 30, 2022 by a range of exercise prices:
| Schedule Of Share-based Payment Arrangement, Option, Activity | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
Weighted | |
| |
| |
|
| |
| |
average | |
| |
| |
|
| |
Number of | |
remaining | |
| |
Number of | |
Weighted |
Range of exercise
prices | |
outstanding | |
contractual | |
Weighted average | |
vested | |
average |
From | |
To | |
options | |
life (in years) | |
exercise price | |
options | |
exercise price |
$ | 0.92 | | |
| 2.96 | | |
| 3,903,762 | | |
| 5.38 | | |
| 2.30 | | |
| 3,868,762 | | |
| 2.29 | |
$ | 3.15 | | |
| 4.80 | | |
| 2,078,800 | | |
| 5.59 | | |
| 3.30 | | |
| 2,058,800 | | |
| 3.28 | |
$ | 5.04 | | |
| 8.98 | | |
| 3,957,054 | | |
| 6.32 | | |
| 6.28 | | |
| 2,356,221 | | |
| 6.30 | |
$ | 10.09 | | |
| 17.03 | | |
| 1,798,000 | | |
| 9.38 | | |
| 11.05 | | |
| 209,997 | | |
| 14.40 | |
$ | 18.11 | | |
| 24.58 | | |
| 1,297,000 | | |
| 9.08 | | |
| 19.39 | | |
| 68,750 | | |
| 24.03 | |
| | | |
| | | |
| 13,034,616 | | |
| | | |
| | | |
| 8,562,530 | | |
| | |
The
weighted average grant date fair value of options vested during the three and nine months ended June 30, 2022 was $3.83 (2021: $3.16).
At June 30, 2022, the weighted average contractual life of options outstanding was 6.62 years (September 30, 2021: 6.65 years) and for
options exercisable was 5.21 years (September 30, 2021: 5.80 years).
The
aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price
of the Company’s stock for the options that were in-the-money at June 30, 2022.
Anavex
Life Sciences Corp.
Notes
to the Interim Condensed Consolidated Financial Statements
June
30, 2022
(Unaudited)
Note
6 Commitments and Contingencies – (Continued)
| e) | Stock-based
Compensation Plan – (Continued) |
During
the three and nine months ended June 30, 2022, the Company recognized stock-based compensation expense of $3,988,614 and $12,336,844
(2021: $2,293,925 and $5,079,395), respectively, in connection with the issuance and vesting of stock options and warrants in exchange
for services. These amounts have been included in general and administrative expenses and research and development expenses on the
Company’s statement of operations as follows:
Schedule of general and administrative expenses and research and development expenses | |
| | | |
| | | |
| | | |
| | |
| |
Three months
ended June 30, | |
Nine months
ended June 30, |
| |
2022 | |
2021 | |
2022 | |
2021 |
General
and administrative | |
$ | 1,490,267 | | |
$ | 1,048,606 | | |
$ | 4,739,021 | | |
$ | 2,265,387 | |
Research
and development | |
| 2,498,347 | | |
| 1,245,319 | | |
| 7,597,823 | | |
| 2,814,008 | |
Total
stock-based compensation | |
$ | 3,988,614 | | |
$ | 2,293,925 | | |
$ | 12,336,844 | | |
$ | 5,079,395 | |
An
amount of approximately $24,276,312 in stock-based compensation is expected to be recorded over the remaining term of such options
through fiscal 2025.
The
fair value of each option award granted during the three and nine months ended June 30, 2022 and 2021 is estimated on the date of grant
using the Black Scholes option pricing model based on the following weighted average assumptions:
Schedule of weighted average assumptions for fair value of each option award | |
| | | |
| | |
| |
2022 | |
2021 |
Risk-free interest rate | |
| 3.10 | % | |
| 0.71 | % |
Expected life of options (years) | |
| 5.51 | | |
| 5.66 | |
Annualized volatility | |
| 84.12 | % | |
| 95.87 | % |
Dividend rate | |
| 0.00 | % | |
| 0.00 | % |
The
fair value of stock compensation charges recognized during the three and nine months ended June 30, 2022 and 2021 was determined with
reference to the quoted market price of the Company’s shares on the grant date.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking
Statements
This
Quarterly Report on Form 10-Q includes forward-looking statements. All statements other than statements of historical facts contained
in this Quarterly Report on Form 10-Q, including statements regarding our anticipated future clinical and regulatory milestone events,
future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements.
The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,”
“expect” “should,” “forecast,” “could,” “suggest,” “plan” and
similar expressions, as they relate to us, are intended to identify forward-looking statements. Such forward-looking statements include,
without limitation, statements regarding:
|
● |
volatility
in our stock and in the markets in general; |
|
|
|
|
● |
our
ability to successfully conduct clinical and preclinical trials for our product candidates; |
|
|
|
|
● |
our
ability to raise additional capital on favorable terms and the impact of such activities on our stockholders and stock price; |
|
● |
the
impact of the COVID-19 outbreak and its effect on us; |
|
|
|
|
● |
our
ability to generate any revenue or to continue as a going concern; |
|
|
|
|
● |
our
ability to execute our research and development plan on time and on budget; |
|
|
|
|
● |
our
products’’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates; |
|
|
|
|
● |
our
ability to obtain the support of qualified scientific collaborators; |
|
|
|
|
● |
our
ability, whether alone or with commercial partners, to successfully commercialize any of our product candidates that may be approved
for sale; |
|
|
|
|
● |
our
ability to identify and obtain additional product candidates; |
|
|
|
|
● |
our
reliance on third parties in non-clinical and clinical studies; |
|
|
|
|
● |
our
ability to defend against product liability claims; |
|
|
|
|
● |
our
ability to safeguard against security breaches; |
|
|
|
|
● |
our
ability to obtain and maintain sufficient intellectual property protection for our product candidates; |
|
|
|
|
● |
our
ability to comply with our intellectual property licensing agreements; |
|
|
|
|
● |
our
ability to defend against claims of intellectual property infringement; |
|
|
|
|
● |
our
ability to comply with the maintenance requirements of the government patent agencies; |
|
|
|
|
● |
our
ability to protect our intellectual property rights throughout the world; |
|
|
|
|
● |
competition;
|
|
|
|
|
● |
the
anticipated start dates, durations and completion dates of our ongoing and future clinical studies; |
|
|
|
|
● |
the
anticipated designs of our future clinical studies; |
|
|
|
|
● |
the
impact of fast track designation on receipt of actual FDA approval; |
|
|
|
|
● |
our
anticipated future regulatory submissions and our ability to receive regulatory approvals to develop and market our product candidates,
including any orphan drug or fast track designations; and |
|
|
|
|
● |
our
anticipated future cash position. |
We
have based these forward-looking statements largely on our current expectations and projections about future events, including the responses
we expect from the U.S. Food and Drug Administration, (“FDA”), and other regulatory authorities and financial trends that
we believe may affect our financial condition, results of operations, business strategy, preclinical and clinical trials, and financial
needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions including without limitation
the risks described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on November 24, 2021. These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q include
additional factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and
rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk
factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking
statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements
will be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as
required by applicable laws including the securities laws of the United States, we assume no obligation to update or supplement forward-looking
statements.
As
used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” and “Anavex”
mean Anavex Life Sciences Corp., unless the context clearly requires otherwise.
Our
Current Business
Anavex
Life Sciences Corp. is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics by applying
precision medicine to central nervous system (“CNS”) diseases with high unmet need. We analyze genomic data from clinical
studies to identify biomarkers, which we use to select patients that will receive the therapeutic benefit for the treatment of neurodegenerative
and neurodevelopmental diseases.
Our
lead compound, ANAVEX®2-73, is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially
other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder
caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).
We
currently have two core programs and two seed programs. Our core programs are at various stages of clinical and preclinical development,
in neurodegenerative and neurodevelopmental diseases.
The
following table summarizes key information about our programs:
*
= Orphan Drug Designation by the FDA; Dashed lines indicate planned clinical studies
Anavex
has a portfolio of compounds varying in sigma-1 receptor (S1R) binding activities. The SIGMAR1 gene encodes the S1R protein, which is
an intracellular chaperone protein with important roles in cellular communication. S1R is also involved in transcriptional regulation
at the nuclear envelope and restores homeostasis and stimulates recovery of cell function when activated. In order to validate the ability
of our compounds to activate quantitatively the S1R, we performed, in collaboration with Stanford University, a quantitative Positron
Emission Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX®2-73 target engagement or receptor
occupancy (RO) with S1R in the brain.
Source:
Reyes S et al., Sci Rep. 2021 Aug 25; 11(1):17150s
Cellular
Homeostasis
Many
diseases are possibly directly caused by chronic homeostatic imbalances or cellular stress of brain cells. In pediatric diseases like
Rett syndrome or infantile spasms, the chronic cellular stress is possibly caused by the presence of a constant genetic mutation. In
neurodegenerative diseases, such as Alzheimer’s and Parkinson’s diseases, chronic cellular stress is possibly caused by age-correlated
buildup of cellular insult and hence chronic cellular stress. Specifically, defects in homeostasis of protein or ribonucleic acid (“RNA”)
lead to the death of neurons and dysfunction of the nervous system. The spreading of protein aggregates resulting in a proteinopathy,
a characteristic finding in Alzheimer’s and Parkinson’s diseases that results from disorders of protein synthesis, trafficking,
folding, processing or degradation in cells. The clearance of macromolecules in the brain is particularly susceptible to imbalances that
result in aggregation and degeneration in nerve cells. For example, Alzheimer’s disease pathology is characterized by the presence
of amyloid plaques, neurofibrillary tangles, which are aggregates of hyperphosphorylated Tau protein that are a marker of other diseases
known as tauopathies as well as inflammation of microglia. With the SIGMAR1 activation through SIGMAR1 agonists like ANAVEX®2-73,
our approach is to restore cellular balance, i.e. homeostasis. Therapies that correct defects in cellular homeostasis might have the
potential to halt or delay neurodevelopmental and neurodegenerative disease progression.
ANAVEX®2-73-specific
Biomarkers
A
full genomic analysis of Alzheimer’s disease (AD) patients treated with ANAVEX®2-73 resulted in the identification
of actionable genetic variants. A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX®2-73
and COMT, a gene involved in memory function, on the drug response level was identified, leading to an early ANAVEX®2-73-specific
biomarker hypothesis. It is expected that excluding patients with SIGMAR1 identified biomarker variant (approximately 10%-20%
of the population) in prospective studies would identify approximately 80%-90% patients that would display clinically significant improved
functional and cognitive scores.
The
consistency between the identified DNA and RNA data related to ANAVEX®2-73, which are considered independent of AD pathology,
as well as multiple endpoints and time-points, provides support for precision medicine clinical development of ANAVEX®2-73
by using genetic biomarkers identified within the study population itself to target patients who are most likely to respond to ANAVEX®2-73
treatment in AD as well as indications like Parkinson’s disease dementia (PDD) or Rett syndrome (RTT) in which ANAVEX®2-73
is currently studied.
Clinical
Studies Overview
Alzheimer’s
Disease
In
November 2016, we completed a Phase 2a clinical trial, consisting of PART A and PART B, which lasted a total of 57 weeks, for ANAVEX®2-73
in mild-to-moderate Alzheimer’s patients. This open-label randomized trial met both primary and secondary endpoints and was designed
to assess the safety and exploratory efficacy of ANAVEX®2-73 in 32 patients. ANAVEX®2-73 targets sigma-1
and muscarinic receptors, which have been shown in preclinical studies to reduce stress levels in the brain believed to restore cellular
homeostasis and to reverse the pathological hallmarks observed in Alzheimer’s disease. In October 2017, we presented positive pharmacokinetic
(PK) and pharmacodynamic (PD) data from the Phase 2a study, which established a concentration-effect relationship between ANAVEX®2-73
and study measurements. These measures obtained from all patients who participated in the entire 57 weeks include exploratory cognitive
and functional scores as well as biomarker signals of brain activity. Additionally, the study appears to show that ANAVEX®2-73
activity is enhanced by its active metabolite (ANAVEX19-144), which also targets the sigma-1 receptor and has a half-life approximately
twice as long as the parent molecule.
Two
consecutive trial extensions for the Phase 2a trial have allowed participants who completed the 52-week PART B of the study to continue
taking ANAVEX®2-73, providing an opportunity to gather extended safety data for a cumulative time period of five years.
In August 2020, patients completing these Phase 2a trial extensions were granted continued access to treatment with ANAVEX®2-73
through the Australian Government Department of Health – Therapeutic Goods Administration (TGA) compassionate use Special Access
Scheme.
A
larger Phase 2b/3 double-blind, placebo-controlled study of ANAVEX®2-73 in Alzheimer’s disease commenced in August
2018. The Phase 2b/3 study enrolled 509 patients for 48 weeks, randomized 1:1:1 to two different ANAVEX®2-73 doses or
placebo. The trial commenced in Australia; and during fiscal 2020 additional regions were added in the United Kingdom, The Netherlands,
Germany and Canada. The ANAVEX®2-73 Phase 2b/3 study design incorporates genomic precision medicine biomarkers identified
in the ANAVEX®2-73 Phase 2a study. Primary and secondary endpoints will assess safety and both cognitive and functional
efficacy, measured through Alzheimer’s Disease Assessment Scale – Cognition (ADAS-Cog), ADCS-ADL and Clinical Dementia Rating
– Sum of Boxes for cognition and function (CDR-SB). The study completed enrollment in June 2021, exceeding the 450 patient enrollment
target at 52 sites across North America, Europe and Australia.
In
October 2019, we initiated a long-term open label extension study of ANAVEX®2-73, entitled the ATTENTION-AD study, for
patients who have completed the 48-week Phase 2b/3 placebo-controlled trial referenced above. This study is expected to last two years
and will give patients the opportunity to continue their treatment. Upon request by patients, caretakers and investigators, this extension
study was extended by one further year.
Rett
Syndrome
In
February 2016, we presented positive preclinical data for ANAVEX®2-73 in Rett syndrome, a rare neurodevelopmental disease.
The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”). In January 2017, we were awarded
a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter Phase 2 clinical trial
of ANAVEX®2-73 for the treatment of Rett syndrome. This award was received in quarterly instalments which commenced during
fiscal 2018.
In
March 2019, we commenced the first Phase 2 clinical trial in a planned Rett syndrome program of ANAVEX®2-73 for the treatment
of Rett syndrome. The studies will be conducted in a range of patient age demographics and geographic regions, utilizing a convenient
oral liquid once-daily formulation of ANAVEX®2-73.
The
first Phase 2 study, (ANAVEX®2-73-RS-001), which took place in the United States, was completed in December 2020. This trial was
a randomized double-blind, placebo-controlled safety, tolerability, pharmacokinetic and efficacy study of oral liquid ANAVEX®2-73
formulation in 25 adult female patients with Rett syndrome over a 7-week treatment period including ANAVEX®2-73-specific
genomic precision medicine biomarkers. The primary endpoint of the trial was safety. The dosing of 5 mg ANAVEX®2-73 was
well-tolerated and demonstrated dose-proportional PK (pharmacokinetics). All secondary efficacy endpoints of the trial showed statistically
significant and clinically meaningful response in the Rett Syndrome Behaviour Questionnaire (RSBQ AUC) Total scores, when compared to
placebo, in the ITT cohort (all participants, p = 0.011). 66.7% of ANAVEX®2-73 treated subjects showed a statistically
significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the ITT cohort (all participants, p = 0.011).
ANAVEX®2-73 treatment resulted in a sustained improvement in Clinical Global Impression Improvement (CGI-I) scores throughout
the 7-week study, when compared to placebo in the ITT cohort (all participants, p = 0.014). Consistent with previous ANAVEX®2-73
clinical trials, patients carrying the common form of the SIGMAR1 gene treated with ANAVEX®2-73 experienced stronger improvements
in the prespecified efficacy endpoints.
The
second, international study of ANAVEX®2-73 for the treatment of Rett syndrome, called the AVATAR study, commenced in June
2019. This study took place in Australia and the United Kingdom using a higher dose than the U.S. based Phase 2 study for Rett syndrome.
The study was a Phase 3 randomized, double-blind, placebo-controlled trial to evaluate the safety and efficacy of ANAVEX®2-73
in 33 patients over a 7-week treatment period including ANAVEX®2-73 specific precision medicine biomarkers. Following
the successful completion of the U.S. Phase 2 Rett syndrome study (ANAVEX®2-73-RS-001), and the knowledge gained from it, the endpoints
for the AVATAR study (ANAVEX®2-73-RS-002) were appropriately updated according to ICH guidelines and were approved by the U.K. Medicines
and Healthcare products Regulatory Agency (MHRA) and in Australia by the Human Research Ethics Committees (HREC), where the AVATAR study
was conducted. Subsequently the AVATAR study was updated from a Phase 2 to a Phase 3 study.
The
data of the AVATAR study was released in February 2022. The study met all primary and secondary efficacy and safety endpoints, with consistent
improvements in primary efficacy endpoint, RSBQ AUC (p = 0.037) response, and secondary efficacy endpoints, ADAMS (p = 0.010) and CGI-I
(p = 0.037) response. Efficacy endpoints demonstrated statistically significant and clinically meaningful reductions in Rett syndrome
symptoms. Convenient once daily oral liquid doses of up to 30mg of ANAVEX®2-73 were also well tolerated with good medication
compliance. All patients who participated in the study are eligible to receive ANAVEX®2-73 under a voluntary open label
extension protocol, which is currently ongoing.
In
July 2020, we commenced the third study of ANAVEX®2-73 for the treatment of Rett syndrome, called the EXCELLENCE study.
This Phase 2/3 study in pediatric patients with Rett syndrome will evaluate the safety and efficacy of ANAVEX®2-73 in
approximately 84 pediatric patients, aged 5 to 18, over a 12-week treatment period incorporating ANAVEX®2-73 specific
precision medicine biomarkers. All patients who participate in the study will be eligible to receive ANAVEX®2-73 under
a voluntary open label extension protocol.
Parkinson’s
Disease
In
September 2016, we presented positive preclinical data for ANAVEX®2-73 in an animal model of Parkinson’s disease,
which demonstrated significant improvements on behavioral, histopathological, and neuroinflammatory endpoints. The study was funded by
the Michael J. Fox Foundation. Additional data announced in October 2017 indicates that ANAVEX®2-73 induces robust neurorestoration
in experimental Parkinsonism. The encouraging results we have gathered in this model, coupled with the favorable profile of this compound
in the Alzheimer’s disease trial, support the notion that ANAVEX®2-73 is a promising clinical candidate drug for
Parkinson’s disease dementia.
In
October 2020, we completed a double-blind, randomized, placebo-controlled proof-of-concept Phase 2 trial with ANAVEX®2-73
in Parkinson’s Disease Dementia (PDD), to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s
disease. The Phase 2 study enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX®2-73
doses, 30mg and 50mg, or placebo. The ANAVEX®2-73 Phase 2 PDD study design incorporated genomic precision medicine biomarkers
identified in the ANAVEX®2-73 Phase 2a Alzheimer’s disease study.
Within
this study ANAVEX®2-73 was safe and well tolerated in oral doses up to 50mg once daily. The results show clinically meaningful,
dose-dependent, and statistically significant improvements in the Cognitive Drug Research (CDR) computerized assessment system analysis.
Treatment with ANAVEX®2-73 also resulted in clinically meaningful improvements as measured by the global composite score
of Parkinson’s disease symptom severity, MDS-UPDRS Total score on top of standard of care including dopaminergic therapy, levodopa
and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX®2-73’s potential global capability
of slowing and reversing symptoms that progress in Parkinson’s disease. The study confirmed the precision medicine approach of
targeting SIGMAR1 as a genetic biomarker in response to ANAVEX®2-73.
In
January 2021, we announced we were awarded a research grant of $1.0 million from The Michael J. Fox Foundation for Parkinson’s
Research (MJFF) to develop ANAVEX®2-73 for the treatment of Parkinson’s disease. The award will explore utilization
of PET imaging biomarkers to enable measurement of target engagement and pathway activation of the sigma-1 receptor (SIGMAR1) with clinically
relevant doses in people with Parkinson’s disease.
Frontotemporal
Dementia
In
July 2020, we commenced the First-in-Human Phase 1 clinical trial of ANAVEX®3-71. ANAVEX®3-71 was previously
granted orphan drug designation for the treatment of Frontotemporal Dementia (FTD) by the FDA. ANAVEX®3-71 is an orally
administered small molecule targeting sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.
In preclinical studies, ANAVEX®3-71 demonstrated disease-modifying activity against the major hallmarks of Alzheimer’s
disease in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, as well as beneficial effects on mitochondrial
dysfunction and neuroinflammation.
The
Phase 1 clinical trial was a prospective double-blind, randomized, placebo-controlled study. A total of 36 healthy male and female subjects
were included. Single escalating doses of ANAVEX®3-71 were administered in order to evaluate the safety, tolerability,
and pharmacokinetics (PK) of ANAVEX®3-71 and the effects of food and gender on its PK in healthy volunteers.
The
study met its primary and secondary endpoints of safety, with no serious adverse events (SAEs) or dose-limiting toxicities observed.
ANAVEX®3-71 was well tolerated in all cohorts receiving ANAVEX®3-71 in single doses ranging from 5 mg to
200 mg daily with no SAEs and no significant lab abnormalities in any subject. In the study, ANAVEX®3-71 exhibited linear
pharmacokinetics. Its pharmacokinetics was also dose proportional for doses up to 160 mg. Gender had no effect on the PK of the drug
and food had no effect on the bioavailability of ANAVEX®3-71. The study also met the secondary objective of characterizing
the effect of ANAVEX®3-71 on electrocardiogram (ECG) parameters. There were no clinically significant ECG parameters throughout
the study. Participant QTcF measures were normal across all dose groups with no difference between ANAVEX®3-71 and placebo.
Based
on these results, and ANAVEX®3-71 pre-clinical profile, the Company intends to advance ANAVEX®3-71 into
a biomarker-driven clinical development dementia program for the treatment of FTD, schizophrenias and Alzheimer’s disease, evaluating
longitudinal effect of treatment with ANAVEX®3-71. We believe the results of these studies could serve as the basis for
advancing into respective registration studies in the U.S.
Our
Pipeline
Our
research and development pipeline includes ANAVEX®2-73 currently in three different clinical study indications, and several
other compounds in different stages of clinical and pre-clinical study.
Our
proprietary SIGMACEPTOR™ Discovery Platform produced small molecule drug candidates with unique modes of action, based on our understanding
of sigma receptors. Sigma receptors may be targets for therapeutics to combat many human diseases, both of neurodegenerative nature,
including Alzheimer’s disease, as well as of neurodevelopmental nature, like Rett syndrome. When bound by the appropriate ligands,
sigma receptors influence the functioning of multiple biochemical signals that are involved in the pathogenesis (origin or development)
of disease. Multiple viruses including SARS-CoV-2 (COVID-19) induce cellular stress by intrinsic mitochondrial apoptosis and other related
cellular processes, in order to ensure survival and replication. Hence, it is possible that S1R could play a role in modulating the cellular
response to viral infection and ameliorate pathogenesis.
Compounds
that have been subjects of our research include the following:
ANAVEX®2-73
(blarcamesine)
ANAVEX®2-73
may offer a disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of sigma-1 receptors.
In
Rett syndrome, administration of ANAVEX®2-73 resulted in both significant and dose related improvements in an array of
behavioral paradigms in the MECP2 HET Rett syndrome disease model. In addition, in a further experiment sponsored by Rettsyndrome.org,
ANAVEX®2-73 was evaluated in automatic visual response and respiration tests in 7-month old mice, an age at which advanced
pathology is evident. Vehicle-treated MECP2 mice demonstrated fewer automatic visual responses than wild-type mice. Treatment with ANAVEX®2-73
for four weeks significantly increased the automatic visual response in the MECP2 Rett syndrome disease mice. Additionally, chronic oral
dosing daily for 6.5 weeks of ANAVEX®2-73 starting at ~5.5 weeks of age was conducted in the MECP2 HET Rett syndrome disease
mouse model assessed the different aspects of muscular coordination, balance, motor learning and muscular strengths, some of the core
deficits observed in Rett syndrome. Administration of ANAVEX®2-73 resulted in both significant and dose related improvements
in an array of these behavioral paradigms in the MECP2 HET Rett syndrome disease model.
In
May 2016 and June 2016, the FDA granted Orphan Drug Designation to ANAVEX®2-73 for the treatment of Rett syndrome and
infantile spasms, respectively. In November 2019, the FDA granted to ANAVEX®2-73 the Rare Pediatric Disease (RPD) designation
for the treatment of Rett syndrome. The RPD designation provides priority review by the FDA to encourage the development of treatments
for rare pediatric diseases.
Further,
in February 2020, the FDA granted Fast Track designation for the ANAVEX®2-73 clinical development program for the treatment
of Rett syndrome. The FDA Fast Track program is designed to facilitate and expedite the development and review of new drugs to address
unmet medical needs in the treatment of serious and life-threatening conditions.
For
Parkinson’s disease, data demonstrates significant improvements and restoration of function in a disease modifying animal model
of Parkinson’s disease. Significant improvements were seen on all measures tested: behavioral, histopathological, and neuroinflammatory
endpoints. In October 2020, we completed a double-blind, randomized, placebo-controlled proof-of-concept Phase 2 trial with ANAVEX®2-73
in Parkinson’s Disease Dementia (PDD), to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s
disease. The Phase 2 study enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX®2-73
doses, 30mg and 50mg, or placebo. The ANAVEX®2-73 Phase 2 PDD study design incorporated genomic precision medicine biomarkers
identified in the ANAVEX®2-73 Phase 2a Alzheimer’s disease study.
The
study found that ANAVEX®2-73 was safe and well tolerated in oral doses up to 50mg once daily. The results show clinically
meaningful, dose-dependent, and statistically significant improvements in the Cognitive Drug Research (CDR) computerized assessment system
analysis. We anticipate conducting further clinical trials of ANAVEX®2-73 in Parkinson’s disease dementia after
submitting the results of the study to the FDA to obtain regulatory guidance.
In
Alzheimer’s disease (AD) animal models, ANAVEX®2-73 has shown pharmacological, histological and behavioral evidence
as a potential neuroprotective, anti-amnesic, anti-convulsive and anti-depressive therapeutic agent, due to its potent affinity to sigma-1
receptors and moderate affinities to M1-4 type muscarinic receptors. In addition, ANAVEX®2-73 has shown a potential dual
mechanism which may impact amyloid, tau pathology and inflammation. In a transgenic AD animal model Tg2576, ANAVEX®2-73
induced a statistically significant neuroprotective effect against the development of oxidative stress in the mouse brain, as well as
significantly increased the expression of functional and synaptic plasticity markers that is apparently amyloid-beta independent. It
also statistically alleviated the learning and memory deficits developed over time in the animals, regardless of sex, both in terms of
spatial working memory and long-term spatial reference memory.
Based
on the results of pre-clinical testing, we initiated and completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX®2-73.
In this Phase 1 SAD trial, the maximum tolerated single dose was defined per protocol as 55-60 mg. This dose is above the equivalent
dose shown to have positive effects in mouse models of AD. There were no significant changes in laboratory or electrocardiogram (ECG)
parameters. ANAVEX®2-73 was well tolerated below the 55-60 mg dose with only mild adverse events in some subjects. Observed
adverse events at doses above the maximum tolerated single dose included headache and dizziness, which were moderate in severity and
reversible. These side effects are often seen with drugs that target CNS conditions, including AD.
In
December 2014, a Phase 2a clinical trial was initiated for ANAVEX®2-73, for the treatment of Alzheimer’s disease.
The open-label randomized trial was designed to assess the safety and exploratory efficacy of ANAVEX®2-73 in 32 patients
with mild-to-moderate Alzheimer’s disease. ANAVEX®2-73 is an orally available drug candidate that restores cellular
homeostasis by targeting sigma-1 and muscarinic receptors. Preclinical studies demonstrated its potential to halt and/or reverse the
course of Alzheimer’s. The Phase 2a study met both primary and secondary objectives of the study.
In
July 2018, we presented the results of a genomic DNA and RNA evaluation of the participants in the Phase 2a study. More than 33,000 genes
were analyzed using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA & RNA data in
patients exposed to ANAVEX®2-73. The analysis identified genetic variants that impacted response to ANAVEX®2-73,
among them variants related to the Sigma-1 receptor (SIGMAR1), the target for ANAVEX®2-73. Results showed that study participants
with the common SIGMAR1 wild type gene variant, which is about 80 percent of the population worldwide, demonstrated improved cognitive
(MMSE) and the functional (ADCS-ADL) scores. The results from this evaluation have been used to establish a precision medicine approach
in subsequent clinical trials, since these signatures can now be applied to neurological indications tested in clinical studies with
ANAVEX®2-73 including Alzheimer’s disease, Parkinson’s disease dementia and Rett syndrome.
ANAVEX®2-73
data presented met prerequisite information in order to progress into a Phase 2b/3 placebo-controlled study. On July 2, 2018, the Human
Research Ethics Committee in Australia approved the initiation of our Phase 2b/3, double-blind, randomized, placebo-controlled 48-week
safety and efficacy trial of ANAVEX®2-73 for the treatment of early Alzheimer’s disease. Clinical trial sites in
Canada, the United Kingdom, the Netherlands and Germany were also added. This Phase 2b/3 study design incorporates inclusion of genomic
precision medicine biomarkers identified in the ANAVEX®2-73 Phase 2a study. The Phase 2b/3 study, which commenced in October
2018, randomized 1:1:1 to either two different ANAVEX®2-73 doses or placebo, completed enrollment in June 2021.
Preclinical
data also validates ANAVEX®2-73 as a prospective platform drug for other neurodegenerative diseases beyond Alzheimer’s
disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms, Fragile X syndrome, Angelman syndrome,
multiple sclerosis and, more recently, tuberous sclerosis complex (TSC). ANAVEX®2-73 demonstrated significant improvements
in all of these indications in the respective preclinical animal models.
In
a study sponsored by the Foundation for Angelman Syndrome, ANAVEX®2-73 was assessed in a mouse model for the development
of audiogenic seizures. The results indicated that ANAVEX®2-73 administration significantly reduced audiogenic-induced
seizures. In a study sponsored by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX®2-73
restored hippocampal brain-derived neurotrophic factor (BDNF) expression to normal levels. BDNF under-expression has been observed in
many neurodevelopmental and neurodegenerative pathologies. BDNF signaling promotes maturation of both excitatory and inhibitory synapses.
ANAVEX®2-73 normalization of BDNF expression could be a contributing factor for the positive data observed in both neurodevelopmental
and neurodegenerative disorders like Angelman and Fragile X syndromes.
Preclinical
data presented also indicates that ANAVEX®2-73 demonstrates protective effects of mitochondrial enzyme complexes during
pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental
diseases.
Preclinical
data on ANAVEX®2-73 related to multiple sclerosis indicates that ANAVEX®2-73 may promote remyelination
in multiple sclerosis disease. Further, data also demonstrates that ANAVEX®2-73 provides protection for oligodendrocytes
(“OL’s”) and oligodendrocyte precursor cells (“OPC’s”), as well as central nervous system neurons
in addition to helping repair by increasing OPC proliferation and maturation in tissue culture.
In
March 2018, we presented preclinical data of ANAVEX®2-73 in a genetic mouse model of tuberous sclerosis complex (“TSC”).
TSC is a rare genetic disorder characterized by the growth of numerous benign tumors in many parts of the body with a high incidence
of seizures. The preclinical data demonstrates that treatment with ANAVEX®2-73 significantly increases survival and reduces
seizures.
ANAVEX®3-71
ANAVEX®3-71
is a clinical drug candidate with a novel mechanism of action via sigma-1 receptor activation and M1 muscarinic allosteric modulation,
which has been shown to enhance neuroprotection and cognition in Alzheimer’s disease models. ANAVEX®3-71 is a CNS-penetrable
potential disease modifying treatment for cognitive impairments. It is highly effective in very small doses against the major Alzheimer’s
hallmarks in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, and also has beneficial effects on
inflammation and mitochondrial dysfunctions. ANAVEX®3-71 indicates extensive therapeutic advantages in Alzheimer’s
and other protein-aggregation-related diseases given its ability to enhance neuroprotection and cognition via sigma-1 receptor activation
and M1 muscarinic allosteric modulation.
A
preclinical study examined the response of ANAVEX®3-71 in aged transgenic animal models and showed a significant reduction
in the rate of cognitive deficit, amyloid beta pathology and inflammation with the administration of ANAVEX 3-71. In April 2016, the
FDA granted Orphan Drug Designation to ANAVEX®3-71 for the treatment of Frontotemporal dementia (FTD).
During
pathological conditions ANAVEX®3-71 demonstrated the formation of new synapses between neurons (synaptogenesis) without
causing an abnormal increase in the number of astrocytes. In neurodegenerative diseases such as Alzheimer’s and Parkinson’s
disease, synaptogenesis is believed to be impaired. Additional preclinical data presented also indicates that in addition to reducing
oxidative stress, ANAVEX®3-71 demonstrates protective effects of mitochondrial enzyme complexes during pathological conditions,
which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.
In
July 2020, we commenced the first Phase 1 clinical trial of ANAVEX®3-71. The study took place in Australia and was
a double-blind, randomized, placebo-controlled, Phase 1 trial to evaluate safety and tolerability, and pharmacokinetics (PK) of oral
escalating doses of ANAVEX®3-71 including effects of food and gender in healthy volunteers The study met its primary and
secondary endpoints of safety, respectively with no serious adverse events (SAEs) or dose-limiting toxicities observed, as more fully
described above under Clinical Studies Overview – Frontotemporal Dementia.
Based
on these results, and ANAVEX®3-71 pre-clinical profile, the Company intends to advance ANAVEX®3-71 into
a biomarker-driven clinical development dementia program for the treatment of FTD, schizophrenias and Alzheimer’s disease, evaluating
longitudinal effect of treatment with ANAVEX®3-71. Anavex believes the results of these studies, could serve as the basis
for advancing into respective registration studies in the U.S.
ANAVEX®1-41
ANAVEX®1-41
is a sigma-1 agonist. Pre-clinical tests revealed significant neuroprotective benefits (i.e., protects nerve cells from degeneration
or death) through the modulation of endoplasmic reticulum, mitochondrial and oxidative stress, which damages and impairs cell viability.
In addition, in animal models, ANAVEX®1-41 prevented the expression of caspase-3, an enzyme that plays a key role in apoptosis
(programmed cell death) and loss of cells in the hippocampus, the part of the brain that regulates learning, emotion and memory. These
activities involve both muscarinic and sigma-1 receptor systems through a novel mechanism of action.
Preclinical
data presented also indicates that ANAVEX®1-41 demonstrates protective effects of mitochondrial enzyme complexes during
pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental
diseases.
ANAVEX®1066
ANAVEX®1066,
a mixed sigma-1/sigma-2 ligand, is designed for the potential treatment of neuropathic and visceral pain. ANAVEX®1066
was tested in two preclinical models of neuropathic and visceral pain that have been extensively validated in rats. In the chronic constriction
injury model of neuropathic pain, a single oral administration of ANAVEX®1066 dose-dependently restored the nociceptive
threshold in the affected paw to normal levels while leaving the contralateral healthy paw unchanged. Efficacy was rapid and remained
significant for two hours. In a model of visceral pain, chronic colonic hypersensitivity was induced by injection of an inflammatory
agent directly into the colon and a single oral administration of ANAVEX®1066 returned the nociceptive threshold to control
levels in a dose-dependent manner. Companion studies in rats demonstrated the lack of any effects on normal gastrointestinal transit
with ANAVEX®1066 and a favorable safety profile in a battery of behavioral measures.
ANAVEX®1037
ANAVEX®1037
is designed for the treatment of prostate and pancreatic cancer. It is a low molecular weight, synthetic compound exhibiting high affinity
for sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels. In advanced
pre-clinical studies, this compound revealed antitumor potential. It has also been shown to selectively kill human cancer cells without
affecting normal/healthy cells and also to significantly suppress tumor growth in immune-deficient mice models. Scientific publications
highlight the possibility that these ligands may stop tumor growth and induce selective cell death in various tumor cell lines. Sigma
receptors are highly expressed in different tumor cell types. Binding by appropriate sigma-1 and/or sigma-2 ligands can induce selective
apoptosis. In addition, through tumor cell membrane reorganization and interactions with ion channels, our drug candidates may play an
important role in inhibiting the processes of metastasis (spreading of cancer cells from the original site to other parts of the body),
angiogenesis (the formation of new blood vessels) and tumor cell proliferation.
Our
compounds are in the pre-clinical and clinical testing stages of development, and there is no guarantee that the activity demonstrated
in pre-clinical models will be shown in human testing.
We
continue to identify and initiate discussions with potential strategic and commercial partners to most effectively advance our programs
and realize maximum shareholder value. Further, we may acquire or develop new intellectual property and assign, license, or otherwise
transfer our intellectual property to further our goals.
Our
Target Indications
We
have developed compounds with potential application to two broad categories and several specific indications. including:
Central
Nervous System Diseases
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Alzheimer’s
disease – In 2022, an estimated 6.5 million Americans were suffering from Alzheimer’s disease. The Alzheimer’s
Association® estimates that by 2050, this number will rise to 12.7 million Americans. Medications on the market today
treat only the symptoms of Alzheimer’s disease and do not have the ability to stop its onset or its progression. There is an
urgent and unmet need for both a disease modifying cure for Alzheimer’s disease as well as for better symptomatic treatments. |
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Parkinson’s
disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and
slow, imprecise movement. It is associated with degeneration of the basal ganglia of the brain and a deficiency of the neurotransmitter
dopamine. Parkinson’s disease afflicts more than 10 million people worldwide, typically middle-aged and elderly people. The
Parkinson’s disease market is expected to expand to $11.5 billion by 2029, according to business intelligence provider GBI
Research. |
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Rett
syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain
develops, including protein transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.
It is considered a rare, progressive neurodevelopmental disorder and is caused by a single mutation in the MECP2 gene. Because males
have a different chromosome combination from females, boys who have the genetic MECP2 mutation are affected in devastating ways.
Most of them die before birth or in early infancy. For females who survive infancy, Rett syndrome leads to severe impairments, affecting
nearly every aspect of the child’s life; severe mental retardation, their ability to speak, walk and eat, sleeping problems,
seizures and even the ability to breathe easily. Rett syndrome affects approximately 1 in every 10,000-15,000 females. |
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Depression
– Depression is a major cause of morbidity worldwide according to the World Health Organization. Pharmaceutical treatment for depression
is dominated by blockbuster brands, with the leading nine brands historically accounting for approximately 75% of total sales. However,
the dominance of the leading brands is waning, largely due to the effects of patent expiration and generic competition. |
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Epilepsy
– Epilepsy is a common chronic neurological disorder characterized by recurrent unprovoked seizures. These seizures are transient
signs and/or symptoms of abnormal, excessive or synchronous neuronal activity in the brain. According to the Centers for Disease Control
and Prevention, in 2015 epilepsy affected 3.4 million Americans. Today, epilepsy is often controlled, but not cured, with medication
that is categorized as older traditional anti-epileptic drugs and second generation anti-epileptic drugs. Because epilepsy afflicts sufferers
in different ways, there is a need for drugs used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic
drugs. |
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Neuropathic
Pain – We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of
the body. Neuralgia is more difficult to treat than some other types of pain because it does not respond well to normal pain medications.
Special medications have become more specific to neuralgia and typically fall under the category of membrane stabilizing drugs or antidepressants. |
Cancer
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Malignant
Melanoma – Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and the eye. Malignant
melanoma accounts for 75% of all deaths associated with skin cancer. The treatment includes surgical removal of the tumor, adjuvant treatment,
chemo and immunotherapy, or radiation therapy. According to iHealthcareAnalyst, Inc. the worldwide malignant melanoma market is expected
to grow to $6.4 billion by 2027. |
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Prostate
Cancer – Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.
The cancer cells may metastasize from the prostate to other parts of the body, particularly the bones and lymph nodes. Drug therapeutics
for prostate cancer are expected to increase to nearly $13.5 billion in 2024 according to Datamonitor Healthcare. |
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Pancreatic
Cancer – Pancreatic cancer is a malignant neoplasm of the pancreas. In the United States, approximately 55,000 new cases of pancreatic
cancer will be diagnosed this year and approximately 44,000 patients will die as a result of their cancer, according to the American
Cancer Society. Sales predictions by FutureWise forecast that the market for the global pharmaceutical treatment of pancreatic cancer
will increase to $4.7 billion by 2027. |
Patents,
Trademarks and Intellectual Property
We
hold ownership or exclusive rights to fifteen U.S. patents, sixteen U.S. patent applications, and various PCT or ex-U.S. patent applications
relating to our drug candidates, methods associated therewith, and to our research programs.
We
own one issued U.S. patent entitled “ANAVEX®2-73 and certain anticholinesterase inhibitors composition and method
for neuroprotection” claims a composition of matter of ANAVEX®2-73 directed to a novel and synergistic neuroprotective
compound combined with donepezil and other cholinesterase inhibitors. This patent is expected to expire in June 2034, absent any patent
term extension for regulatory delays. We own three issued U.S. patents each with claims directed to crystalline forms of ANAVEX®2-73.
The first of these three patents claims crystalline forms of ANAVEX®2-73, dosage forms and compositions containing crystalline
ANAVEX®2-73, and methods of treatment for Alzheimer’s disease using them. This patent is expected to expire in July
2036, absent any patent term extension for regulatory delays. The second of these three patents claims pharmaceutical compositions containing
a crystalline form of ANAVEX®2-73, and methods of treatment for Alzheimer’s disease using the compositions. This
patent is expected to expire in June 2037, absent any patent term extension for regulatory delays. The third of these three patents claims
pharmaceutical compositions containing a crystalline form of ANAVEX®2-73, and methods of treatment for Alzheimer’s
disease using the compositions. This patent is expected to expire in June 2037, absent any patent term extension for regulatory delays.
We also own two issued U.S. patents for seizure treatment. The first of these two patents claims methods and dosage forms for treating
seizures, the dosage forms containing a low-dose anti-epilepsy drug combined with either: (i) ANAVEX®2-73 and its active
metabolite ANAVEX®19-144; or (ii) ANAVEX®19-144. The second of these two patents further claims a combination
seizure treatment involving administration of an anti-epilepsy drug combined with (i) ANAVEX®19-144, or (ii) ANAVEX 19-144®
and ANAVEX 2-73®. Both patents are expected to expire in October 2035, absent any patent term extension for regulatory
delays. We also own two issued U.S. patents with claims directed to treating neurodevelopmental disorders. These patents claim methods
for treating a neurodevelopmental disorder or multiple sclerosis by administering ANAVEX®2-73, ANAVEX®19-144,
and/or ANAVEX®1-41 (another sigma receptor ligand similar to ANAVEX®2-73), or compositions thereof. Both
patents are expected to expire in January 2037, absent any patent term extension for regulatory delays. In addition, we own one issued
U.S. Patent with claims directed to methods of treating melanoma with a compound related to ANAVEX®2-73. This patent is
expected to expire in February 2030, absent any patent term extension for regulatory delays. We also own an issued U.S. patent that claims
crystalline forms of ANAVEX®19-144, dosage forms and compositions containing the crystalline forms of ANAVEX®19-144,
and methods of treatment for Alzheimer’s disease. This patent is expected to expire in July 2036, absent any patent term extension
for regulatory delays. Further, we own one issued U.S. Patent with claims directed to methods of treating cardiac dysfunction with ANAVEX®2-73
. This patent is expected to expire in July 2038, absent any patent term extension for regulatory delays.
We
also own two issued U.S. patents related to ANAVEX®1066. The first of these two patents claims methods for treating or
preventing pain using (+) ANAVEX®1066 isomer. The second patent claims methods for treating or preventing pain using (-)
ANAVEX®1066 isomer. Both patents are expected to expire in November 2036, absent any patent term extension for regulatory
delays.
For
ANAVEX®2-73, ANAVEX®19-144, ANAVEX®1-41, and ANAVEX®1066, we also have granted
or pending applications in Australia, Canada, China, Europe, Japan, and Hong Kong, which are expected to expire after 2035.
With
regard to ANAVEX®3-71, we own exclusive rights to two issued U.S. patents with claims respectively directed to the ANAVEX®3-71
compound and methods of treating various diseases including Alzheimer’s with the same. These patents are expected to expire in
April 2030, and January 2030, respectively, absent any patent term extension for regulatory delays. We also own exclusive rights to related
patents or applications that are granted or pending in Australia, Canada, China, Europe, Japan, Korea, New Zealand, Russia, and South
Africa, which are expected to expire in January 2030.
We
also own other patent applications directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide
additional protection for one or more of our product candidates.
We
regard patents and other intellectual property rights as corporate assets. Accordingly, we attempt to optimize the value of intellectual
property in developing our business strategy including the selective development, protection, and exploitation of our intellectual property
rights. In addition to filings made with intellectual property authorities, we protect our intellectual property and confidential information
by means of carefully considered processes of communication and the sharing of information, and by the use of confidentiality and non-disclosure
agreements and provisions for the same in contractor’s agreements. While no agreement offers absolute protection, such agreements
provide some form of recourse in the event of disclosure, or anticipated disclosure.
Our
intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions
for which important legal principles are unresolved. For more information regarding challenges to our existing or future patents, see
“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on
November 24, 2021.
Financial
Overview
We
are in the development stage and have not earned any revenues since our inception in 2004. We do not anticipate earning any revenues
until we can establish an alliance with other companies to develop, co-develop, license, acquire or market our products.
Our
operating costs consist primarily of research and development activities including the cost of clinical studies and clinical supplies
as well as clinical drug manufacturing and formulation. Research and development expenses also include personnel related costs such as
salaries and wages, and third-party contract research organization (CRO) expenses in support of these clinical studies. Personnel costs
include salaries and wages, benefits, and non-cash stock-based compensation charges associated with options and other equity awards granted
to employees and consultants who are directly engaged in support of our research and development activities.
General
and administrative expenses consist of personnel costs, expenses for outside professional services and expenses associated with operating
as a public company. Personnel costs consist of salaries and wages, benefits and stock-based compensation for general and administrative
personnel. Outside professional services and public company expenses include expenses related to compliance and reporting, additional
insurance expenses, audit and SOX compliance, expenses associated with patent research, applications and filings, investor and shareholder
relations activities and other administrative expenses and professional services.
Comparison
of the three and nine months ended June 30, 2022 and 2021
During
the three and nine months ended June 30, 2022, we continued to advance enrollment of our EXCELLENCE international Phase 2/3 pediatric
Rett syndrome clinical trial at new clinical sites in the United Kingdom and Canada.
With
respect to our double blind, placebo-controlled Phase 2b/3 study for the treatment of Alzheimer’s disease the last patient visit
was completed end of June 2022. We expect to announce top line data from that study in the second half of 2022.
We
also recently completed this quarter the last patient visit with respect to the 48-week open label extension of the Phase 2 clinical
trial in Parkinsons Disease Dementia.
Additionally,
we continued to run open label extensions of our recently completed AVATAR study and the Phase 2b/3 Alzheimer’s disease study.
Operating
Expenses
Total operating expenses for the third quarter of
fiscal 2022 were $12.5 million, compared to $11.4 million for the comparable third quarter of fiscal 2021. Total operating expenses for
the nine-month period ended June 30, 2022 were $35.7 million compared to $29.7 million for the same period in fiscal 2021.
General
and administrative expenses were $3.2 million for the three months ended June 30, 2022, as compared to $2.4 million for the third quarter
of fiscal 2021. Similarly, general and administrative expenses were $9.2 million for the nine months ended June 30, 2022, as compared
to $6.1 million for the nine months ended June 30, 2021. The increase in general and administrative expense is primarily related to (i)
an increase in non-cash stock option compensation charges of $0.4 million and $2.5 million, in the three and nine month periods respectively,
in connection with the vesting of stock options to an expanding team, (ii) an increase in corporate insurance costs and (iii) an increase
in intellectual property professional fees to maintain our strong patent positions.
Our
research and development expenses for the three months ended June 30, 2022 were $9.3 million, as compared to $9.0 million for the three
months ended June 30, 2021. Our research and development expenses were $26.5 million for the nine-month period ended June 30, 2022, as
compared to $23.6 million for the comparable nine-month period in 2021. The increase in research and development expenses is primarily
driven by an increase in non-cash stock option compensation charges of $1.3 million and $4.8 million in the three and nine month periods
respectively, associated with an expanding team directly engaged in support of ongoing research and development activities. For the nine-month
period ended June 30, 2022, this increase was partially offset by a decrease in clinical trial expenditures over the comparable period,
associated with the completion of the enrollment and recruitment activities for our Phase 2b/3 trial in Alzheimer’s disease, and
manufacturing activities in the comparable period associated with the Rett syndrome program.
Other
income (net)
The
net amount of other income for the three months ended June 30, 2022 was $0.2 million as compared to $1.3 million for the comparable three
months ended June 30, 2021 and $2.2 million for the nine-month period as compared to $3.7 million for the comparable nine-month period
in fiscal 2021. The decrease in other income for the three-month period is partially related to differences in foreign exchange fluctuations
of the Australian dollar against the US dollar as they relate to incentive and tax receivables denominated in Australian Dollars.
As
well, the decrease in other income for the three and nine-month periods is attributable to a decrease in Australian research and development
incentive income in connection with the decrease in eligible clinical activities in Australia over the comparable period such as the
completion of the ANAVEX®3-71 Phase 1 clinical study and other Australian arms of ongoing clinical programs.
Net
loss
Net
loss for the third quarter of fiscal 2022 was $12.4 million, or $0.16 per share, as compared to $10.2 million, or $0.14 per share in
the comparative third quarter of fiscal 2021 and $33.7 million, or $0.44 per share, for the nine-month period ended June 30, 2022, as
compared to $26.2 million, or $0.39 per share in the comparative nine-month period ended June 30, 2021.
Liquidity
and Capital Resources
Working
Capital
| |
June
30,
2022 | |
September 30, 2021 |
Current Assets | |
$ | 160,221,144 | | |
$ | 161,616,490 | |
Current Liabilities | |
| 9,484,544 | | |
| 10,798,386 | |
Working Capital | |
$ | 150,736,600 | | |
$ | 150,818,104 | |
At
June 30, 2022, we held $153.2 million in cash and cash equivalents, an increase of $1.1 million from September 30, 2021. Cash used in
operations was $20.2 million for the nine-month period ended June 30, 2022, compared to $22.7 million in the comparable nine-month period
ended June 30, 2021. We received cash from financing activities of $21.3 million, primarily from the issuance of shares of common stock
under the Sales Agreement (as defined below).
We
intend to continue to use our capital resources to advance our clinical trials for ANAVEX®2-73 and ANAVEX®3-71,
and to perform work necessary to prepare for future development of our pipeline compounds.