Anavex Life Sciences (AVXL) - 2022 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements Presents unaudited interim consolidated financial statements, reporting a net loss of $12.4 million for the quarter and $33.7 million for nine months, with a cash position of $153.2 million Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $153,199,352 | $152,107,745 | | Total Assets | $160,221,144 | $161,616,490 | | Total Liabilities | $9,484,544 | $10,798,386 | | Total Stockholders' Equity | $150,736,600 | $150,818,104 | Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $(12,458,720) | $(11,398,655) | $(35,701,857) | $(29,749,416) | | Net 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) | Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (Nine months ended June 30) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(20,193,929) | $(22,709,166) | | Net cash provided by financing activities | $21,285,536 | $151,020,193 | | Increase in cash and cash equivalents | $1,091,607 | $128,311,027 | - The company is a clinical-stage biopharmaceutical firm developing therapeutics for Central Nervous System (CNS) diseases, with its lead compound ANAVEX2-73 being developed for Alzheimer's, Parkinson's, and Rett syndrome[22] - Management believes the current working capital position is sufficient to meet requirements for more than 12 months, despite expecting continued negative cash flows from operations as the company has not yet generated any revenue[26][29] - During the nine months ended June 30, 2022, the company sold 1,623,566 shares under its Sales Agreement, generating gross proceeds of $20,982,148[49] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Discusses the company's business, clinical programs, and financial results, noting increased operating expenses and net loss, alongside a strong liquidity position of $153.2 million in cash Business Overview and Pipeline Outlines Anavex's clinical-stage focus on CNS diseases, featuring lead compound ANAVEX2-73 in late-stage trials for Alzheimer's, Rett syndrome, and Parkinson's, and ANAVEX3-71 for Frontotemporal Dementia - The company's lead compound, ANAVEX2-73, is being developed to treat Alzheimer's disease, Parkinson's disease, and Rett syndrome[84] - The Phase 2b/3 study of ANAVEX2-73 in Alzheimer's disease enrolled 509 patients and completed enrollment in June 2021[93] - The AVATAR Phase 3 study for Rett syndrome met all primary and secondary endpoints, and a pediatric Phase 2/3 study (EXCELLENCE) is ongoing[99][100] - A Phase 1 clinical trial of ANAVEX3-71 for Frontotemporal Dementia (FTD) met its primary and secondary safety endpoints, with plans for further clinical development[106][108][109] - The company holds fifteen U.S. patents and various international patent applications related to its drug candidates and research programs[146] Financial Overview and Results of Operations Reports increased operating expenses for Q3 2022 to $12.5 million and for nine months to $35.7 million, driven by higher non-cash stock-based compensation and R&D, resulting in a wider net loss Operating Expenses Comparison (in millions) | Expense Category | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :--- | :--- | :--- | :--- | :--- | | General & Administrative | $3.2 | $2.4 | $9.2 | $6.1 | | Research & Development | $9.3 | $9.0 | $26.5 | $23.6 | | Total Operating Expenses | $12.5 | $11.4 | $35.7 | $29.7 | Net Loss Comparison | Period | Net Loss 2022 | EPS 2022 | Net Loss 2021 | EPS 2021 | | :--- | :--- | :--- | :--- | :--- | | Q3 (3 months) | $12.4M | $(0.16) | $10.2M | $(0.14) | | 9 Months | $33.7M | $(0.44) | $26.2M | $(0.39) | - The increase in G&A and R&D expenses was primarily driven by higher non-cash stock option compensation charges, increased corporate insurance costs, and intellectual property professional fees[158][159] Liquidity and Capital Resources Details Anavex's strong liquidity with $153.2 million in cash and equivalents, noting $20.2 million net cash used in operations and $21.3 million raised from ATM equity offering - The company held $153.2 million in cash and cash equivalents as of June 30, 2022[163] Cash Flow Summary (Nine months ended June 30, 2022) | Metric | Amount | | :--- | :--- | | Net cash used in operating activities | $(20.2) million | | Net cash provided by financing activities | $21.3 million | | Net increase in cash | $1.1 million | - During the nine months ended June 30, 2022, the company raised gross proceeds of $21.0 million ($20.3 million net) through its At-the-Market (ATM) Offering[171] Quantitative and Qualitative Disclosures About Market Risks States this section is not applicable, indicating no material exposure to market risks requiring quantitative and qualitative disclosure - The company states this item is "Not applicable"[175] Controls and Procedures Management, including the CEO and Principal Financial Officer, deemed disclosure controls and procedures effective as of June 30, 2022, with no material changes to internal control over financial reporting - Management, including the principal executive officer and principal financial officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[177] - There were no changes to the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[178] PART II – OTHER INFORMATION Legal Proceedings Reports no material pending legal proceedings, other than ordinary litigation incidental to business operations - The company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to its business[179] Risk Factors Indicates no material changes to risk factors previously disclosed in the Annual Report on Form 10-K for fiscal year ended September 30, 2021 - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2021[180] Unregistered Sales of Equity Securities and Use of Proceeds Confirms no unregistered equity securities sales during the period that were not previously reported on a Form 8-K - The company has not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a Current Report on Form 8-K[181] Defaults Upon Senior Securities Reports no defaults upon its senior securities - The company reports "None" regarding defaults upon senior securities[181] Mine Safety Disclosures States this item is not applicable to the company's business operations - This item is noted as "Not applicable"[181] Other Information Reports no other information to disclose for this item - The company reports "None" for this item[182] Exhibits Lists exhibits filed with Form 10-Q, including Articles of Incorporation, Bylaws, CEO and PFO certifications, and XBRL data files - The report includes a list of filed exhibits, such as CEO and PFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL data files[182]