Anavex Life Sciences Corp.'s (AVXL) Q4 2019 Results - Earnings Call
Anavex Life Sciences Corp. (NASDAQ:AVXL) Q4 2019 Results Earnings Conference Call December 16, 2019 4:30 PM ET
Company Participants
Clint Tomlinson - Investor Relations
Christopher Missling - President and Chief Executive Officer
Sandra Boenisch - Principal Financial Officer
Conference Call Participants
Edward Marks - H.C. Wainwright
Yun Zhong - Janney
Operator
Good afternoon. My name is Hilda and I will be your conference call operator today. Welcome to the Anavex Life Sciences to announce Fiscal 2019 Fourth Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded.
I would now like to introduce your host for today’s conference, Clint Tomlinson. Please go ahead.
Clint Tomlinson
Thank you, and good afternoon, everyone. We appreciate you joining us today for Anavex Life Sciences conference call and webcast. Our agenda is to review the company’s financial results for fiscal 2019 and provide a clinical study update. A taped replay of this call will be available approximately two hours after the call’s conclusion and will remain available for one month. The call will also be available for replay on Anavex’s website www.anavex.com.
With us today is Dr. Christopher Missling, President and Chief Executive Officer; and Sandra Boenisch, Principal Financial Officer. Dr. Missling and Ms. Boenisch will make prepared remarks, and then we will take questions from equity analysts.
Before we begin, please note that during this conference call, the company will make some projections and forward-looking statements regarding future events. We encourage you to review the company’s filings with the SEC. This includes, without limitation, the company’s Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in those forward-looking statements. These factors may include, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights.
And with that, I would like to turn the call over to Dr. Missling.
Christopher Missling
Thank you. I’d like to thank everyone for joining us on today’s conference call to review our fiscal 2019 financial results and share with you our clinical updates for ANAVEX 2-73 or also called blarcamesine.
First, in the U.S. - first the U.S. Food and Drug Administration, FDA, granted the Rare Pediatric Disease, RPD designation for ANAVEX 2-73 for the treatment of Rett syndrome. The RPD designation provides the opportunity for the award of a pediatric review voucher at the time of marketing approval.
In a recent peer review journal preclinical data of ANAVEX 2-73 in Rett syndrome in a study entitled ANAVEX 2-73, blarcamesine, a Sigma-1 receptor agonist, ameliorates neurological impairments in a mouse model of Rett syndrome confirmed the proof-of-concept for the ongoing Phase 2 clinical studies. To offer all participants access to ANAVEX 2-73 after completion of the ANAVEX 2-73 U.S. Phase 2 Rett syndrome study and the AVATAR Rett syndrome study, 12-week and 48-week open label extension studies respectively were initiated. Currently, 90% and 100% of eligible participants have continued into the corresponding extension studies.
The international EXCELLENCE Rett syndrome study of ANAVEX 2-73 in pediatric patients was approved by the Australian Human Research Ethics Committee and is scheduled to initiate early 2020. Anavex Life Sciences presented data at the 12th clinical trials of Alzheimer’s Disease, CTAD 2019 Conference reporting baseline-matched Real-World external control data of Alzheimer’s Disease Neuroimaging Initiative ADNI with ANAVEX 2-73 Phase 2a clinical data, demonstrating a significantly lower cognitive decline of the sufficiently dosed ANAVEX 2-73 Phase 2a study cohort compared to the ADNI control cohort at the interim two-year which is 104-week time point.
Separately, abundance of two relevant families of bacteria were identified as potential biomarkers of response from the two-year study interim clinical data analysis of ANAVEX 2-73. Enrollment for the Phase 2b/3 ANAVEX 2-73 Alzheimer’s disease study is nearly 50% recruited. To offer all participants of the study access to ANAVEX 2-73, a voluntary 96-week open-label extension study called ATTENTION-AD was initiated and currently 95% of eligible participants have opted into the extension study.
Enrollment for the Phase 2 ANAVEX 2-73 Parkinson’s disease dementia study is expected to be completed by the end of December 2019 with top-line data expected mid-2020. To offer all participants of the study access to ANAVEX 2-73, a voluntary 48-week open-label extension study, including microbiome assessment, was initiated and currently 100% of eligible participants have opted into the extension study.
And now, I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex for a brief financial summary of the recently reported quarter.
Sandra Boenisch
Thank you, Christopher. Good afternoon everyone. During fiscal 2019 we made significant progress in the advancement of clinical studies for ANAVEX 2-73 as Christopher has just described. We were able to continue to advance with fiscal responsibility by utilizing non-dilutive grants from the Rett Foundation and the Australian Government third-party support in order to fund our operational objectives beyond the next 24 months.
Our operating expenses for fiscal 2017 increased to $29.1 million from $19.3 million in fiscal 2018. However, these operating expenses do include approximately $6.4 million in non-cash accounting charges. The increase in operating expenses is attributable to an increase in research and development expenses of $9 million in 2019 from $13.3 million in fiscal 2018 to $22.3 million in fiscal 2019.
We reported net other income of $2.9 million which includes Australian research and development incentive income of $2.2 million. During fiscal 2019 we utilized cash of $18.5 million to fund our operations compared to $12.6 million during fiscal 2018 and our cash position at September 30th 2019 was $22.2 million.
Thank you, and now I will turn the call back over to Christopher.
Christopher Missling
Thank you, Sandra. In summary, we continue to make steady progress towards reaching several important milestones and we are poised for an exciting 2020 with multiple data readouts. We look forward to provide further updates as advancements continue.
I would now like to open the call for questions. Operator, please go ahead.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from Raghuram Selvaraju - H.C. Wainwright.
Edward Marks
Good afternoon. This is Edward Marks on for Ram. I appreciate you taking our questions. What's the scope and design of the pediatric Rett syndrome trial and are the efficacy endpoints similar to those used in the adult trial?
Christopher Missling
It's a very good question. Indeed, so the endpoints are similar to the Rett adult study and the period of the study is a 12-week period study with an additional extension period and the extension will be open-label. The randomized controlled part will be 12-week long.
Edward Marks
Perfect and then looking at the CTAD presentation, what's the pathological significance of those two bacterial families in Alzheimer's patients and is there any indication that these would also be indicated in Parkinson’s disease and what micro biomarkers might be in Parkinson's context?
Christopher Missling
So, they are very relevant for two reasons. There is a data - evidence of data showing that the gut microbiota is corresponding with the brain and vice versa. And it looks like there is increased variations of gut microbiota in healthy subjects compared to patients, both Alzheimer’s and Parkinson's, but the question is related also to Parkinson's. And the goal is now to find out if these could be used as a biomarker and to answer that question we included in the Parkinson's study also microbiota assessment before and after.
And that is one of the data points which we did from the Phase 2a was only at one point, so we still have to confirm that this effect is correlated with an impact on the drug which we believe because it correlates with the concentration of the drug administered to the patient and the respective response. But ultimately what we need at this point in time is a before and after measurement of this gut microbiota and that's what we are now doing in the Parkinson's disease study.
So eventually we will be able to answer that question, how and what relevance these microbiota variations have in patients in Parkinson's and also in Alzheimer’s disease.
Edward Marks
All right, and with Alzheimer’s when is the Phase 2b/3 Alzheimer’s trial likely to reach full enrollment and would you say that the enrollment phase is speeding up, static or currently for Alzheimer’s?
Christopher Missling
So we expect actually an increase in enrollment because we're adding sites. We have to appreciate that so far the enrollment has been exclusively in Australia. And I understand that we have reached the highest enrollment in Australia ever in the history of Alzheimer’s study enrollment in terms of numbers recruited for Alzheimer’s patients.
So now we are expanding to additional territories and so this will allow what we believe in addition to the existing sites in Australia for an uptick in enrollment speed for the Alzheimer’s study. We have not yet set a target when we are completing enrollment, but we will communicate that as soon as we have that available and we can make that confirmation when the study will be fully enrolled.
Edward Marks
Got it, looking forward to it. And then on a broader level, assuming positive data in the Parkinson's study with [indiscernible] what would next steps look like for the drug in this in this indication?
Christopher Missling
We would probably share this with regulatory authorities and to seek guidance how this data could be then leading to moving this forward towards approval since Parkinson's disease dementia has not received yet a drug which seems to be utilized in the community. There's only one drug approved which however does not get used because of significant side effects. That will be the next step.
Edward Marks
Perfect, I appreciate all the detail. Thank you.
Christopher Missling
Thank you.
Operator
[Operator Instructions] Our next question comes from Yun Zhong from Janney.
Yun Zhong
Hi, thanks for taking the questions. So two questions on the Rett syndrome program. Are you waiting for initial data from the Phase 2 study and Australian study before you will initiate the pediatric study? If not and what will be the limiting steps that you will have to complete before you will be able to initiate the pediatric study?
Christopher Missling
So we are not really waiting for that, but there is certainly a chance that this will overlap a little bit, so but there's not like a dependency directly correlated dependency.
Yun Zhong
Okay and then given that this is the third study with quite meaningful number of patients close to 70 patients for an orphan [ph] indication, what's the potential assuming that that data are positive with the potential for the study to serve as a pivotal study?
Christopher Missling
Which one, if I may ask?
Yun Zhong
The pediatric study.
Christopher Missling
Yes, so we are planning and this is still to be confirmed. But given that we have knowledge about design for this indication, we are planning to power the study so this could become and could be sufficiency as a pivotal study and the two additional studies in adult Rett syndrome would be obviously also utilized as supported for that strategy.
Yun Zhong
Okay and last question on the dose that is currently valued in the Parkinson's dementia, can you remind us how did they compare to the higher concentration or low concentration that you achieved in the Alzheimer's study?
Christopher Missling
Yes, so the dose is actually very similar to the dose in the Alzheimer's Phase 2a study where we have – we are aiming for a high dose and a medium dose and we believe both doses have potential to be efficacious, both the medium dose as well as the high dose.
Yun Zhong
Okay, great, thank you.
Christopher Missling
Thank you.
Operator
Thank you. At this moment we show no further questions. Mr. Tomlinson, do you have any final remarks?
Clint Tomlinson
We would like to thank all participants in today's conference call. I hope that based on the described development today, you're looking forward to 2020 as much as we are. Should you need additional information or have any questions, please visit our website at www.anavex.com or call or email us. This concludes our remarks for today operator.
Operator
Thank you. Ladies and gentlemen, this concludes our call today. You may now disconnect.
