Anavex Life Sciences Corp. (AVXL) Q3 2025 Earnings Report, Transcript and Summary

Good morning, and welcome to the Anavex Life Sciences Fiscal 2025 Third Quarter Conference Call. My name is Clint Tomlinson, and I will be your host for today's call. [Operator Instructions]. Please note, this conference is being recorded, and the call will be available on Anavex's website at www.anavex.com later today. With us today is Dr. Christopher Missling, President and Chief Executive Officer; and Sandra Boenisch, Principal Financial Officer. Before we begin, please note that this conference call, the company will make some projections and forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. We encourage you to review the company's filings with the SEC, and this includes, without limitation, the company's Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in these forward- looking statements. These factors may include, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights. With that, I'd like to turn the call over to Dr. Missling.

Thank you, Clint, and good morning, everyone. Thank you for being with us today to review our most recently reported financial results and to provide our quarterly business update. Our development of noninvasive targeted upstream compounds continues to advance, particularly in the context of Alzheimer's disease and schizophrenia. Clinical feedback highlights the importance of orally administered therapies that are both accessible and effective. At the recent Alzheimer's Association International Conference, AAIC 2025, we presented open-label extension data for blarcamesine, which demonstrated continued clinically meaningful benefit in early- stage Alzheimer's patients, further validating its therapeutic potential. In June 2025, a survey of Alzheimer's disease stakeholders from European Union member states on current unmet needs in Alzheimer care was conducted. There is a clear acknowledgment that oral therapies would "facilitate things" for many countries and be much more accessible for the respective health care systems, potentially requiring less extensive monitoring and complex administration compared to injectable monoclonal antibodies. This modality difference is seen as a key factor in potential broader market penetration. At the end of July, Anavex was honored to be a part of the program at the 2025 Alzheimer's Association International Conference, AAIC in Toronto. The sharing of knowledge at these central events is important to help advance dementia science to better support the millions of individuals, families and communities impacted by Alzheimer's disease. At the AAIC 2025 conference, we were pleased to present the latest findings for blarcamesine. The data were presented by Marwan Sabbagh, Professor of Neurology and Chairman of the Advisory Board of Anavex. The data showed that blarcamesine-treated patients continue to accrue benefit through up to 4 years as measured by the prespecified clinical endpoints, ADAS-Cog13 and ADCS-ADL, respectively. Further presentations at the AAIC 2025 conference featured prespecified precision medicine Phase IIb/III 48-week ANAVEX 2-73-AD-004 double-blind clinical trial data on blarcamesine, confirming the upstream mechanism of blarcamesine restoring impaired autophagy as an early event preceding amyloid-beta and tau. And now I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a financial summary of the recently reported quarter.

Thank you so much, Christopher, and good morning to everyone on the call. I'm pleased to share with you today our third quarter financial results for our 2025 fiscal year. Our cash position on June 30 was $101.2 million, and we had no debt. During the quarter, we utilized cash and cash equivalents of $12.5 million in operating activities after taking into account changes in noncash working capital accounts. And as of the quarter end, we anticipate at the current adjusted cash utilization rate and range, an approximate runway of more than 3 years. Our research and development expenses for the quarter were $10 million as compared to $11.8 million for the comparable quarter of last year. General and administrative expenses were $4.5 million as compared to $2.8 million for the comparable quarter of last year. Compared to the same quarter of fiscal 2024, an increase in noncash compensation charges was offset by a decrease in overall cash operating expenses due to the completion of a large manufacturing campaign of blarcamesine to support execution and potential commercial readiness as we advance our therapeutic pipeline. And lastly, we reported a net loss of $13.2 million for the quarter or $0.16 per share. Thank you, and back to you, Christopher.

Thank you, Sandra. In summary, we are focused on continuing to advance our precision medicine compounds. We're excited to be potentially making a difference for individuals suffering from these diseases by presenting a scalable treatment alternative alongside the ease of oral administration. I would now like to turn the call back to Clint for Q&A.

Thank you, Christopher. For our first question today, it will be from Soumit Roy from Jones Research.

Christopher, quick question on the -- congrats on the 4-year data. Trying to understand the graph itself, could you help us explain if the delayed start patients, those were the ones from the placebo arm or the randomized trial? And just the nature of the curve between the Cog13 readout and the ADL, the Cog13 doesn't separate until 96 weeks, that's like 2 years versus ADL. Is there any specific thing that's going on there?

So it's a good question. So you're referring to the 4-year open-label extension data.

Yes.

Yes. So let me quickly explain again what is done. The patients are randomized at the beginning on the trial to either receiving placebo or active arm. Those patients who then finish the 48 weeks will get blarcamesine, all of them. So those patients who started blarcamesine, but they were blinded to it, they didn't know, also stay blinded that when they receive blarcamesine if they were receiving blarcamesine in the previous 48 weeks. And they are called the continued blarcamesine or early start group. Those patients who now -- after they had placebo because they were randomized to placebo in the first 48 weeks, they now receive also blarcamesine. And what we now look at is the trajectory of the 2 arms, the early start group, which had blarcamesine since day 1 and those what we call late start group, which had blarcamesine after the placebo-controlled part. And what we find is that those patients who received the drug later after placebo first, they do not catch up to the benefit of those patients who had blarcamesine from day 1 in the previous 48 weeks. And that indicates that if you have Alzheimer's disease, you want to be not getting it too late because you will not get the full benefit of the drug. And the same applies for both cognition, ADAS-Cog13 and activities of daily living or function ADCS-ADL. What we noticed was because of COVID, though, there was not a perfect transition from the end of the trial of 48 weeks into the open-label extension because sites were shut down. And so the patient were just barely able to measure the last measure of 48 weeks, but the open label was not accessible until, in some cases, a year later. But those patients eventually then joined. And what we found was that we could basically separate 2 groups, those patients which were not impacted by COVID, so to speak, by this shutdown trial sites, and those received the drug right away in the active arm specifically. And those had the best performance among all candidates. And those patients who got the drug after a longer pause or drug holiday, we call it also or interruption, they did not benefit as much even if they had previously the drug in the active arm in the placebo-controlled part. So the message is here, the takeaway is twofold. First of all, what I already stated, you want to take the drug as soon as possible once you have an indication and diagnosis of Alzheimer's disease. And secondly, once you start taking blarcamesine, you want to continuously taking it and not interrupting for too long because that would also be not a perfect outcome to keep the cognition and function consistently better. And to answer your question about this difference between ADAS-Cog13 and ADL, I think because of these ADAS-Cog13 is more sensitive to immediate actions and ADL has a bit of maybe a latency, the ADL seems to be more smooth in their trajectory than the ADAS-Cog13. So the ADAS-Cog13 is just more sensitive possibly to these changes, which I just described. And the description in the conference in the graph on the slide shows clearly that those patients who were not interrupted or had a short interruption, they in the ADAS-Cog13, they had a clearly better outcome in the active arm than those who had interruption, what I just basically said a minute ago. I trust that helps to explain the difference.

No, that was Super helpful. Were the patients at the beginning of the open-label extension, were they restaged? Were they still mild stage patients or some of them progressed to moderate?

So certainly, some have advanced, especially the placebo ones have advanced, but we kept all the patients, which was voluntarily in the trial irrespective of how they advanced or if they had advanced to more severe form of dementia. So both were -- all were allowed to continue and the majority did.

But they were not restaged for to assess if they are still mild AD or moderate?

There was no need to because they were eligible to continue to stay on study drug. So irrespective of the staging. Does it make sense? So it's not taking away the ability to continue to stay on the study drug.

No, I was wondering if your drug could even be applicable to the moderate stage patients?

So we have seen that actually in the Phase IIb -- Phase IIa study, which was published 2020 that patients with mild to moderate, so more advanced stage, also benefited from blarcamesine. So in a way, we have confirmed a broader therapeutic window for not only for early Alzheimer's disease, but also for mild to moderate.

One last question. Any guidance on the EMA review or commentary back...

So we stated that we would not provide comments until the final feedback or review is completed, and we stick to that, but we are excited about the progress.

Is that a 10-month review? Could you guide us -- help us with understanding the time line filed in November last year?

So it was filed in November last year. It was accepted in December last year. There's a plus minus time frame and depends also a little bit on variables, which are sometimes not -- cannot be anticipated. So we estimate that first quarter of next year, we should be able to provide feedback about the feedback from the EMA, first quarter next year.

The next questions will come from Tom Bishop. Tom, you're connected, I think you just need to unmute. Tom looks like having some issues. So I will go to the next person who is Jesse Silveira, and he is from Spirit of the Coast Analytics. I just need you to unmute, Jesse.

Can you hear me all right?

Yes. Great.

All right. Clint, Dr. Missling. This is Jesse Silveira with Spirit of the Coast Analytics. We are an independent biotech intelligence group. I wanted to congratulate the Anavex team actually with your newly released data from AAIC. We were exceedingly impressed by the 19.5 months saved by patients. And actually, when benchmarked against Leqembi and Kisunla, the treatment duration to time saved ratio appears really favorable. In fact, at least according to my group's analysis, it appears to be approximately 76% and 58%, respectively. I did have a few questions to start. I was wondering, Dr. Missling, theoretically, could CRISPR technology be used to correct SIGMAR1 genotype, so turning mutation gene back to wild type, in this case, to make blarcamesine and 3-71 more widely efficacious and even potentially increasing the market size. Is that something that could theoretically be done?

Thank you for the question. I think in theory, it does. The good news is that CRISPR technology is advancing rapidly, and it's very much utilized in oncology, which we also follow very closely. But the good thing is about the blarcamesine application is that the most patients, the vast majority has a very functional and wild-type, fully functional SIGMAR1 gene and other genes. So there is really like the benefit of most patients are -- you don't have to apply anything complicated here to begin with. And let's get that first out there and there's always an ability to further improve from there for those who have a mutation and a mutation might not be the perfect response to blarcamesine, but still better than placebo. So we should basically allow this to proceed.

Okay. Great. Additionally, can you tell us more about any Alzheimer's prevention planning? There kind of appears to be an emphasis on that with -- some of the new slides that you put in the corporate slide deck, some emerging preclinical work and the IIb/III delayed start analysis, are you actually looking to potentially run a preventative trial or a prophylactic trial in the future?

We actually do. We had provided an update recently that there was the chance of -- in animals to prevent the onset of the disease of dementia in animals when they were pretreated with blarcamesine and those animals who were not pretreated or with placebo, they developed the cognitive dementia in a water maze when they got injected with toxic and better fragments. And I would also recommend for you to keep an eye on a lookout on a publication which is peer-reviewed will address that in more specific detail. So as a consequence of that, we stated that we would plan such a study. The question is only when we are able to execute this because it will be, of course, a very long study, and that requires more resources. And so we want to first do this step by step by bringing the drug first to market for patients.

Okay. That makes sense. And potentially, you would require a partner for that, potentially. And for my final question, we've observed from public lobbying disclosure filings that Anavex has retained Forbes state partners for government relations and lobbying services. We also saw a social media post from Congressman, Henry Cuellar back in May, acknowledging a meeting with Anavex. And this seems to signal a concerted effort to engage with policymakers, given the critical role of the FDA and other government bodies in the regulatory process for your drug candidates, could you provide some color on the specific strategic objectives of these engagements? And what are your key policy and regulatory goals that you believe this partnership will help you achieve specifically, are there any particular policy discussions or regulatory frameworks you are tracking closely that could impact your commercialization and reimbursement?

We just want to make aware and raise awareness, and it's very commonly done by many, if not all, companies, such activities. And it's really raising the awareness in helping our legislative side to emphasize and provide funding and attention to patients with this terrible disease. And we think that it's important to always keep them up to date, and they welcome that very much because they received information from these interactions. And the area, as you know, is very dynamic as you can see that the Alzheimer's conference recently provided many new features of several drug updates. And so that is a requirement which we like to participate in, in the education of policymakers about the need and unmet need of patients with dementia and Alzheimer's disease specifically.

Sure. That makes sense. And I assume that includes the SIGMAR1 Europe group as well, so teaching regulators and clinicians in Europe as well about SIGMAR1. And I guess to close out my segment here is along those lines, I'm assuming that you have heard of -- and you may have mentioned actually previously, but I assume that you've heard of the new accelerated voucher at the FDA. Is that something that Anavex is interested in and looking into?

I would say that definitely, yes. I think every company with -- who has a program which deserves attention and acceleration, especially if it's an unmet need, would very welcome such a program and so do we. So we very much welcome this program, and we look forward to the implementation of it.

I'm sorry, just to finish, would you say that the chances of you acquiring that voucher is dependent on whether or not you receive an approval with the EMA? Or do you not really have an opinion on that?

I think that's independent of that. I don't think it has any correlation.

Okay. I'm going to try Tom Bishop again. Tom, if you could unmute.

Can you hear me?

Yes. We're good.

As near as I know, the company has only 3-71 in a clinical trial right now. Is that right?

That's correct. We have in compassionate use, though, we have ANAVEX 2-73 or blarcamesine in Alzheimer's disease right now ongoing.

So are all people that were in a prior trial allowed to stay on it basically, even if it's an OLE officially, but like all those...

Yes, so we have started the trial in Australia, and those patients were the first one to finish the trial including the open-label extension study, and those were the ones who asked for a continuation. And that started also with the Phase IIa study in Australia. So Australia has right now patients up to 9 years, including the Phase IIa patient population. Some of them continued to take the drug every day since 2014.

But those on the OLE are also still on it?

The ones in Australia, correct. [indiscernible] in Australia, yes.

No, I mean the full OLE...

Not all of them, only those in Australia continued because the other study participants finished after the open-label extension.

Okay. So I noticed that R&D spending is still like $10 million. And so I'm wondering what -- where that's all going, what -- whether you could run down what people are working on kind of puts some meat on that bone and sort of go down through the pipeline in that regard, Parkinson's, Rett, schizophrenia, Fragile X, that would be very helpful to see what's...

Right. Part of this is going into the preparation for manufacturing. So we have a larger amount for the manufacturing of blarcamesine for the CMC and the preparation of the trials, which we say -- we said we would anticipate to start, that is a Parkinson's disease study. This is a Fragile X study in another rare disease. All of these are also preparation expenses included in this R&D quarter outcome.

Yes, now it's been quite a while since that Parkinson's -- the last Parkinson's study ended. And I'm just wondering what's holding that back or whether you're waiting for EMA results or whatever?

No, it's more like the Parkinson's area has gone through a very dynamic shift in understanding of the disease. And given our recent precision medicine analysis, finding in Alzheimer, we want to really increase the chance of success of this Parkinson's trial as well. And one of the things which makes it challenging in Parkinson's disease is that L-dopa is a very good drug and patients with Parkinson do get L-Dopa. So you have to understand that if you get L-Dopa, and change the dose in the middle of the trial, those patients are not anymore eligible to be included in the analysis. So you lose power and you have to adjust for that. So we have to find a way to avoid that to happen. So we try to find the best way to design the study, so it's becoming -- increase the chance of success. And that's what is the reason why we are making this thorough and not jumping right into it.

Okay. And Rett?

Rett is -- we're really excited about the Rett program, what we've done so far. I think once we have more clarity on the submission with Alzheimer, we would look at that again eventually.

Okay. And regarding the EMA decision, will there be an equivalent of like an FDA advisory committee opinion before that EMA advisory committee, so to speak?

I think it works a bit different. The EMA makes a decision based on all participating countries in Europe, which are 27. So everybody has a vote, and that's how they are making the CHMP recommendation and the European Union parliament then either adopts it or changes the view on that. Mostly, they adopt it. So that is how the assessment is done in the European filing.

Okay. So putting it another way, will we get some preliminary information from the EMA up or down before the final EMA decision is rendered?

So I think the final decision will be rendered only after the CHMP provides their recommendation to the EMA. And then the EMA or the European Union makes the recommendation or the approval. So that is -- there is no interim or whatever. So there will be, as I pointed out before, probably first quarter of next year, a result.

Okay. Can you share with us the state-of-the-art of how you'll go forward with selling blarcamesine if it gets approval, for example, hired sales force, a pharma partner or any interest in somebody acquiring you, some marriage proposals?

So all options are open. The -- there's definitely an unmet need to treat patients with an oral therapeutic intervention in Europe that applies also for the rest of the world. And so there are several companies which we have started the dialogue with about marketing the drug in Europe. But also we have a plan and a proposal ready to -- if we think that the shareholder would be better served with marketing the drug in Europe alone. So we are also able to do that if that turns out to be more favorable for shareholders or resulting in a higher shareholder value creation, but we have the options open until we get there.

Okay. And with regards to noncash compensation expenses, which you signaled out as having gone up. And I guess this is a question for Sandra, but is that increase in large part a function of that line item going up when the stock price goes up? I'm not sure of the formula.

If the stock price is higher when they're granted, then it does impact the value and make it a higher value, yes. It's also a function of how long the vesting period is and if new awards were granted.

I do have a question from Ram from H.C. Wainwright. He's having trouble with the connection. So I'll ask the question for him. Christopher, from Ram. What are likely to be the most important countries in Europe from a commercial standpoint for blarcamesine?

I think I would call out the big 3, Germany, France, Italy and then U.K. is not European anymore, but those are the countries I would think are the largest one to be focusing on.

Okay. A second question from him. Does the potential advent of anti-amyloid antibodies with significantly lower risk of ARIA reduce the need for a safe oral option that does not require MRI-based monitoring?

I think the survey we received just last month, 2 months ago was that there's really like a propensity for the inability to utilize injectable drugs for various reasons. It's not in the DNA, so to speak, of the GPs, general practitioners or neurologists in Europe to administer injectable drugs. It is, for that reason, a very high bar for penetration. And there's an extremely high preference for that reason to offer an oral solution like blarcamesine, which is expected to have, for that reason, a much more significant penetration.

Okay. Great. And then his last question is, can you give any insight into when additional orphan indications for blarcamesine may be disclosed?

So we are preparing and planning a study in another rare disease orphan designation, and we will disclose it once we're getting there, but it's a very exciting indication with high unmet need. So we're very excited about that.

Okay. Great. I may have a follow-up question from Soumit.

A bit on the commercialization effort. Curious if you can provide us some kind of time line when you make the decision whether to go solo or make the partnership because we are probably inside the 6-month period of potential EMA decision?

Yes. So if you look at the historical data of collaborations upfront amount and milestone, there is, of course, a higher shareholder value achieved if you are able to partner something once you have already approval or once you are on market already, that also has been often the case that acquisition or a partnering took place after the company went and marketed itself. So that would be increased the chances of increasing the value for shareholders, and that's what we are after ultimately. So I would say that is the best way to answer this question.

Have you filed in the U.K. because that's not under EMA?

Yes, we are in the planning of doing that. So we mentioned that maybe a quarter or so ago that we are planning to also reach out to other jurisdictions. So this is in the making.

Okay. And one last one is with the EMA, if you can share with us, was there any back and forth between the EMA and their questions that caused the clock to stop after 120 days or 160 days, 181 days and if CHMP is involved already in the -- for the oral explanation?

So the procedure is very standard. There is nothing unusual in the process, and we are abiding by it. So everything is proceeding as standard in the process -- in the review process.

So that is the last -- hang on one second. Yes, that's the last question, Dr. Missling. I'll turn it back over to you.

Thank you very much. In closing, so we'd like to continue to focus on execution and potential commercial readiness as we advance our therapeutic pipeline to potentially improve patients' lives living with these devastating conditions. I'd like to thank you, and good morning to everybody again.

Thank you, ladies and gentlemen. That will conclude today's conference call. Thank you for participating. You may now disconnect.