Good afternoon. My name is Adrienne, and I'll be your conference call operator today. Welcome to the Anavex Life Sciences Fiscal 2021 Third Quarter Conference Call. As a reminder, this conference call is being recorded. I'd now like to turn the call over to your host for today's conference, Clint Tomlinson. Please go ahead.
Thank you, good afternoon, everyone. We appreciate you joining us today for Anavex Life Sciences' third quarter conference call to review financial results and discuss the company's business updates. A taped replay of this call will be available after the call. The call will also be available for replay on Anavex's website at www.anavex.com. With us today is Dr. Christopher Missling, President and Chief Executive Officer, and Sandra Boenisch, Principal Financial Officer. Following management's remarks, there will be a question and answer session. Before we begin, please note that during 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 the number of risks and uncertainties. We encourage you to review the company's filings with the SEC.
This includes without limitation, the company's Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, but 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 we appreciate everyone joining us on today's conference call to review our financial results and describe the company's bold strategy. Let me start by stating that we can proceed into the remainder of 2021 with a background of a strong balance sheet of over $157 million in cash and no debt. Starting with our lead drug candidate, ANAVEX 2-73, we expect to announce top-line results from the confirmatory, double-blind, placebo-controlled late stage phase IIb/III study in Alzheimer's disease in second half 2022. The double-blind, placebo-controlled 509-patient late stage phase IIb/III ANAVEX®2-73 trial in patients with Alzheimer's disease exceeded enrollment beyond 450 patients at 52 sites across North America, Europe, and Australia using ADAS-Cog, cognition, and ADCS-ADL, Activities of Daily Living and function as primary endpoints.
This multi-center, double-blind clinical trial is measuring efficacy, tolerability, and safety of two different once daily oral ANAVEX®2-73 doses or placebo. ANAVEX®2-73 is an orally available small molecule activator of the sigma-1 receptor. Data suggests the activation of sigma-1 results in the restoration of complete housekeeping function within the body and is pivotal to restoring neural cell homeostasis and promote neuroplasticity. The study includes a pre-specified precision medicine biomarker, sigma-1 gene expression, which demonstrated correlation with direct measures of clinical benefit, cognition, and activities of daily living and function in a previous phase II Alzheimer's disease. Technical data previous confirmed dose-dependent target engagement of sigma-1 with ANAVEX®2-73. As a reminder of our clinical strategy is clearly differentiated from other biopharma companies.
In clinical studies in CNS, Anavex is continuing to pioneer the approach of big data in clinical trials to leverage the relevance of phenotypic and genotypic precision medicine analysis of whole exome sequencing and gene expression data in drug development, in particular, the potential to identify patients' genetic variants and gene expression changes that may predict increased chances of success of Alzheimer's disease, Parkinson's disease, and Rett syndrome treatments. We can announce that we exceeded the enrollment target for the precision medicine ANAVEX®2-73 phase II/III AVATAR clinical trial in patients with Rett syndrome. Currently, top-line results from this study are expected in the second half of 2021. Further clinical milestones are provided in Anavex Life Sciences' latest corporate presentation, available at www.anavex.com.
Now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a brief financial summary of the recently reported quarter.
Thank you, Christopher. Good afternoon to everyone. We can report a significant increase in cash runway. Our cash position on June 30th, 2021, was $157.6 million, which we believe is sufficient cash runway to fund operations and clinical programs beyond 2025.
We reported a net loss of $10.2 million for the current quarter, or $0.14 per share, as compared to $6.5 million or $0.11 per share in the comparable quarter last year. Research and development expenses for the quarter were $9 million, compared to $6.7 million for the comparable quarter of fiscal 2020. This increase is primarily attributable to the continued advancement of our ongoing clinical trials, most notably the full enrollment of our international phase IIb/III Alzheimer's disease trial and the continued enrollment and advancement of the international Rett syndrome program. General and administrative expenses were $2.4 million for the quarter as compared to $1.4 million for the prior year period. The increase is associated with the growth of our team and non-recurring costs associated with our annual general meeting. Thank you. Now I will turn the call back to you, Christopher.
Thank you, Sandra. We are extremely excited, and we believe that Anavex has never been in a stronger position than it is today with our recent double-blinded, placebo-controlled study results correlating with predictive biomarker outcomes and the strongest balance sheet to date and the further strengthening of the Anavex team. In summary, we believe we are positioned for further growth and expect a catalyst-rich upcoming 12 months. We look forward to providing further updates as advancement continues. I would like to now open the call for questions. Operator, please go ahead.
Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star then one on your telephone keypad. Our first question comes from Charles Duncan from Cantor. Your line is open.
How are you doing? This is Pete Stavropoulos on for Charles. Good afternoon, Christopher and team. Congratulations on the progress and certainly appreciate all the updates. I have one question regarding the Rett program. When you think about the efficacy measures that were made and were seen, and the efficacy seen in the U.S. adult study, how do you sort of feel about the sample size or the planned effect size out of AVATAR?
We have been observed in the U.S. Rett study at a low dose study of 5 mg daily orally, that effect size in the RSQ was 1.1 Cohen’s d , which is considered very large. For the ADAMS score, it was even larger, 1.3. These are very large effect sizes. In the AVATAR study, we even have a larger population in the placebo-controlled study, and the doses are higher than 5 mg. We expect if there is a dose response curve, a positive dose response curve, which we right now assume it is to be the case, that this effect size will be sufficient for a positive readout in the AVATAR study as well.
Thank you for all that color. Another question I have regarding the Rett program is in clinicaltrials.gov, the Pediatric EXCELLENCE Study states that the estimated completion date is about November 2021. Are you still on track to complete the study by that time? The reason why I'm asking is I believe that you have a large part of it being conducted in Australia, and now unfortunately, they're going back into lockdown in some parts because of COVID.
The study is right now still enrolling well, and the ability to continue the trial is still the case. What we cannot know for certainty how much enrollment is impacted by this current situation in Australia. We still believe as of today that the timelines are accurate to be able to complete the trial in the stated timeframe. If this will change, we will update accordingly.
All right. Thank you. Just one last question on the Alzheimer's program. Can you provide some color on the rollover rates for the phase IIb/III study into the open label extension?
We were really very impressed with the very high rollover rate into the open label study, which was over 95%, which is extremely high. We also have been informed that the patients who now are reaching the end of this extension study, open label, have requested, and the respective caregiver, to stay on study drug. We have now been able to also extend, because of this request, the open label study by another period of time for allowing the open extension study to give these patients continued access to study drug. I want to point out that does not affect the timeline of the placebo-controlled study. It's just in parallel, the ability of the patients who finish the placebo-controlled study to stay on study drug without interruption.
That's good. It's probably perceived a benefit and probably reflects a lack of tolerability issues. Thank you very much for taking my questions, and congratulations again.
Thank you.
Your next question comes from Soumit Roy from Jones Trading. Your line is open. I apologize. It is Soumit Roy from Jones Trading.
Hi. Thank you for taking my questions. First question on the adult AVATAR-Rett study. Do we have an idea if, when you're having a FDA conversation, and if the trial size needs to be modified to turn into a pivotal trial, if you can give us any color on that? Also some color on the dosing for both the AVATAR and EXCELLENCE Studies, what kind of dose cohorts should we expect?
Right. We are in the dialogue right now with the agency. We have Fast Track designation and Orphan Drug designation, as well as the voucher eligibility for Rett syndrome with ANAVEX®2-73. We are right now in dialogue with the agency, and I would like to provide an update with updates as soon as we have that. That would be more appropriate. The second question is regarding the doses. We have a higher dose than 5 mg, and we have used a dose of up to 50 mg in the Parkinson's dementia study and in the Alzheimer's study.
The reason why we're keeping this dosing specifics right now within the blinded information is because the study is in a population which is very new to this trial, and we are concerned that there might be between the family interactions, which could lead to some unblinding of the study or inadvertently to learning about the effect of the drug and making a calculation back on the envelope if more drug is given, how much the effect would be based on the existing data of the 5 mg arm. That's the reason why we keep this right now blinded, but we will obviously disclose it when we have the data. It is higher than the 5 mg dose.
I see. Very interesting. One last question on the Alzheimer's trial. Could you give us any color on the baseline MMSE of these patients? It seems like a wide range, 20-28. What should we be expecting more early stage or mild to moderate enrolling in your phase II-B/III trial?
Right. The rationale for that range was we have seen in the phase II-A prior a very positive response across the entire MMSE baseline score, which started from 16 - 28. We noticed that the patients above 20 MMSE had the ability to improve from baseline on a net positive to reverse the disease symptoms. The cognition was improved and not only the ability to show a delay of the cognitive decline while the patients below 20 MMSE were able to stay on a stable score. The other reason why we included 20 and higher is that these patients are better, still in a better way to comply with the trial regimen. When you have more advanced cognitive impairment often that is not the case.
The patient is really a very broad average within this score of between 20 and 28, which is really also the identified patient population of now called early Alzheimer's disease, which is probably the majority and the highest unmet need with Alzheimer's disease today.
I see. You won't break it up into two groups. You would keep it as the entire 20-28 groups, and that's how you will present the data.
Right, because we saw that there was no difference of the improvement if you were 28 or you were 20. In both cases, we saw with appropriate dose an improvement of the score.
Got it. Thank you so much for taking the questions and I'll hop back on the queue and congrats again on the progress.
Thank you.
The next question comes from Ram Selvaraju from H.C. Wainwright. Your line is open.
Thanks so much for taking my questions. First of all, again alluding to the potential role of blarcamesine in Alzheimer's disease, can you comment on some of the preclinical information that's been presented recently and whether this would potentially point to a protective role for blarcamesine? And specifically, if you can speculate on in which population the use of blarcamesine as a protective might be most relevant from a clinical perspective. For example, in those people who are exhibiting signs of prodromal Alzheimer's disease or mild cognitive impairment. I understand that it's an early stage at which to be thinking about that, but just wanted to get your thoughts in this regard.
Appreciate the question. We have learned in a disease, in a preclinical animal model of prevention. It's basically gave to healthy mice the drug for seven days, every day for seven days. You stop the treatment. Then you inject the toxic A-beta into the brain, which is a known animal model of the pathology. These animals usually they get sick, they lose cognition, and you see that in the measures of water maze behavior and so forth. We noticed in the arm which had been given this seven-day pretreatment prevention, that these animals never developed, after the injection with A-beta, any symptoms of cognitive impairment. They behaved and cognitively stood as their wild type part. Those who were given the A-beta and without the pretreatment, they developed a cognitive impairment as you expected from the animal model.
This is the observation which led to the potential that by one activation with ANAVEX®2-73 , which as we know by now, is extremely upstream and possibly able to prevent the cellular stress, which is caused by the A-beta injection. In the entire challenges of the pathology, which is not limited to A-beta, that this could be used as a prevention also in the future, which has to be also confirmed. The intelligence we have on the Alzheimer study seems to be also giving credibility in that direction since we noticed a gradual ability to improve cognition with earlier stage status of cognitive capacities. When I mentioned before that cognitive impairment lower than 20 MMSE, and the lower score means more cognition or more cognitive impairment that those patients were better off the earlier you treat them.
We might be able to continue the trajectory of into the ability to prevent the cognitive impairment to even take place when we give the drug to patients which are either, as you point out, mildly cognitively impaired or before even any symptoms of cognitive impairment is present, just to be able to always prevent this cellular stress by this activation. We compare it in a way to mini aspirin, which some people take for avoiding cardiovascular problems, and they do that every morning for breakfast. I'm not saying that this is confirmed in humans but eventually we will be able one day to tackle that, and that is the plan in a study.
Great. Thanks. Also, I wanted to ask about your thoughts regarding lessons, takeaways from the Rett syndrome experience with blarcamesine and their applicability to your potential clinical development initiative with the compound in Fragile X syndrome. If you could also give us a sense of when you anticipate the Fragile X syndrome program to initiate patient enrollment. Thank you.
We have included in our Rett syndrome clinical trial a measure which is called ADAMS, and that score is interesting enough, a secondary score in the Rett syndrome study, but it is often used as a primary endpoint in Fragile X studies. That ADAMS score was extremely positive with behavior improvement of general mood, of anxiety, and compulsive behavior improvement which were very significant and very broad and global. We believe that in a data readout of the preclinical data of Fragile X with ANAVEX®2-73, which we submitted to a peer-reviewed paper of a Nature paper, which we expect to come out as forthcoming, that this could be a very good basis for the rationalizing progressing Fragile X into an indication of choice also for ANAVEX®2-73.
The idea of the two move this forward as soon as possible, given the unmet need of Fragile X, which is the largest population of autism spectrum disorder. Rett syndrome is also part of the family of the autism spectrum disorder. These are correlated diseases, although they are originated in different places in the causation, in the causality, but they have similar symptoms and overlapping symptoms with each other. We expect the trial to be initiated once we are able to showcase the data in a peer-reviewed paper.
Thank you very much.
Our next question from Tom Bishop from BI Research.
Hi, Christopher. You said that you expected to include a phase III prevention study, or to initiate one, for the prevention indication, and I was wondering what the status is and how soon we could expect that?
This is something which we would like to discuss with the FDA because this is obviously a very important study, and we want to get that right. We will let that happen first before providing more details on that. I like to just point out the potential to be the case gives us also a great hope that. Given the broad upstream effect of the sigma-1 activation, which is, I want to remind everybody, it's not something we came up with, but it's really the endogenous, the body own defense, and to prevent cellular stress, which causes diseases like Alzheimer's, but also Parkinson's and other cognitive impairment indications and probably also the degenerative and as well as the neurodevelopmental indications, which is the reason why we see this strong effect, beneficial effect with the drug in this broad therapeutic different indications.
This is something we'd like to discuss with the agency first before providing more details. This is the long shot, and this is probably the big prize, that one day this could be used as a prevention treatment for all degenerative diseases and not only for treatment.
That's a very exciting possibility. What is the status of the meeting to proceed on to phase III in Parkinson's? Sometimes it seems like we lose a lot of time between trials. I know you've presented the final data. I'm just wondering what the timeline is here. Have you scheduled a meeting with the FDA or had one or?
That's a very good question. The key background is to know that the trial itself has finished but the analysis is not limited to the endpoints which we reported. There are more work up ongoing right now, and this is also unique for Anavex and differentiates other companies that we have included in our trials, including the PDD trial, the Parkinson's disease dementia trial, the whole exome sequencing, both DNA but also RNA. You know that we reported the RNA changes of the sigma-1 gene. What we have not yet done is to have the intelligence on the RNA of all the other genes, which is the whole genome.
There will be so much more intelligence from this PDD study, which we are right now putting together and once we have that, then we will have the ability to put this all forward because this will determine a much more robust phase III design of a pivotal study in Parkinson's disease dementia, as well as in Parkinson's. That requires also the dialogue with the agency first. Before that, we have to have the entire data at hand.
Wow. Okay. The status of the Michael J. Fox $1 million imaging study. Is Michael J. Fox doing that independently of you? I mean, you're supplying the drug, but they're doing the imaging. How is that going?
It's basically a grant that allows us to do the study, and we are in the process of starting this year. It's a study which will capture the imaging and the profile of the ANAVEX®3-71 of the drug in the brain in the humans with the same PET ligand, which we have done already in animals. This will be a confirmatory of that effect in human brains, and that is the study which was fully funded by Michael J. Fox Foundation, which we are executing and they basically funded that study with a grant.
I see. Okay. You indicated a mystery indication earlier this year. Also there's a 3-71 trial, is there not, put the phase I ongoing. Could you comment on those two? They were one and the same, I don't know.
Right. It's not a mystery indication. We have only said we have not disclosed yet the indication. We have several animal models where ANAVEX®3-71 has been positive, very well, achieving a confirmatory effect on a disease which is rare in nature or ultra-rare in nature. We want to make sure before we move forward with the clinical trial that we pick the right one to do because we have the choice of several indications and we are doing this right now. Once we have completed that assessment, we will disclose that indication and start that trial also right away. Regarding ANAVEX®3-71, it's basically another molecule, has its own IP, and that is now in a phase I, and we expect data readout in the second half of this year.
It's progressing well and we are excited because it confirms, validates the mechanism of action of our platform portfolio to focus on sigma-1 modulation. Also it has received Orphan Drug designation for frontotemporal dementia, which is also an unmet need. We are now preparing after the phase I, the next stage of that, which will be a study in a indication of cognitive impairment. It could very well be a frontotemporal dementia or another indication with an unmet need with cognitive impairment.
The phase I study, are you saying it's done?
It is about to wrap up, and we will be able to report the data in the second half of this year. That's correct.
Will that include any efficacy data, or it's just a safety trial?
It's predominantly a safety trial, but I will allow us to basically share the data once we have it, and that gives us better visibility on what is included in that outcome measures beyond phase I data or on safety data.
Okay. Well, I've been very encouraged by the breadth of the positive readouts you're getting on a variety of indications, and I think that helps support the idea that ANAVEX®2-73 really does something in the brain, which I think you have little doubt of, and I do too but it's just good to see so many different positive readouts coming. Thank you.
If I might add, it is really important to notice and to highlight the fact that in all clinical trials we have performed so far, not only was ANAVEX®2-73 efficacious at the right doses, but it also demonstrated a dose response curve which is always a very clear indication of our effect. Thirdly, we have noticed that all the data, all the trials so far performed had a very strong biomarker of response or predictive biomarker response, which was borne by the level of mRNA expression of the target of our drug itself. There's really no better way of showing efficacy and confirming efficacy of a drug with these strong biomarker outcomes, which correlated with all the primary and secondary endpoints of the trials we have performed.
Well, like I said, it's very encouraging. All right. Thank you.
Thank you.
Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.