Anavex Life Sciences (AVXL) - 2023 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements Anavex Life Sciences Corp. reported a $37.4 million net loss for the nine months ended June 30, 2023, with cash increasing to $154.8 million from financing activities Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2023 ($) | September 30, 2022 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $154,817,164 | $149,157,861 | | Total Assets | $157,809,863 | $152,704,603 | | Liabilities & Equity | | | | Total Liabilities | $11,055,267 | $10,213,561 | | Total Stockholders' Equity | $146,754,596 | $142,491,042 | | Total Liabilities and Stockholders' Equity | $157,809,863 | $152,704,603 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Nine Months Ended June 30, 2023 ($) | Nine Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Research and development | $33,656,364 | $26,534,297 | | General and administrative | $9,447,447 | $9,167,560 | | Total operating expenses | $43,103,811 | $35,701,857 | | Operating loss | $(43,103,811) | $(35,701,857) | | Net loss | $(37,358,973) | $(33,687,519) | | Net Loss per share (Basic and diluted) | $(0.47) | $(0.44) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Nine Months Ended June 30, 2023 ($) | Nine Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,935,371) | $(20,193,929) | | Net cash provided by financing activities | $27,594,674 | $21,285,536 | | Increase in cash and cash equivalents | $5,659,303 | $1,091,607 | - The company is a clinical-stage biopharmaceutical firm focused on developing therapeutics for central nervous system (CNS) diseases, with its lead compound, ANAVEX2-73, in development for Alzheimer's, Parkinson's, and Rett syndrome[23] - During the nine months ended June 30, 2023, the company issued 3,138,348 shares of common stock, raising aggregate proceeds of $26,687,017 under the 2023 Purchase Agreement with Lincoln Park[56] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) The MD&A highlights the company's clinical-stage status, increased operating expenses to $43.1 million, a widened net loss of $37.4 million, and a strong liquidity position with $154.8 million in cash Business Overview and Clinical Pipeline Anavex is a clinical-stage biopharmaceutical company developing therapeutics for CNS diseases, with lead compound ANAVEX2-73 showing promise in multiple trials - Anavex is a clinical-stage biopharmaceutical company developing therapeutics for CNS diseases like Alzheimer's, Parkinson's, and Rett syndrome, using a precision medicine approach with genomic biomarkers[83] - The lead product, ANAVEX2-73, has completed a Phase 2b/3 trial for Alzheimer's disease, meeting co-primary and key secondary endpoints by slowing cognitive and functional decline[89][90] - In Rett Syndrome, the ANAVEX2-73 program includes the completed AVATAR Phase 3 trial, which met all primary and secondary endpoints, and the ongoing EXCELLENCE Phase 2/3 pediatric trial, with topline results expected in the second half of 2023[98][99] - The ANAVEX2-73 Phase 2 trial in Parkinson's disease dementia showed statistically significant improvements in cognitive measures, and a 48-week open-label extension demonstrated longitudinal beneficial effects[101][102][105] - ANAVEX3-71, another pipeline candidate, has completed a Phase 1 trial for Frontotemporal Dementia (FTD) and is being advanced into a biomarker-driven program for dementia, schizophrenia, and Alzheimer's[107][110] Results of Operations Operating expenses increased to $43.1 million for the nine months ended June 30, 2023, primarily due to higher R&D costs, leading to a net loss of $37.4 million Comparison of Operating Expenses (in millions) | Expense Category | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Nine Months Ended June 30, 2023 ($M) | Nine Months Ended June 30, 2022 ($M) | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $10.3 | $9.3 | $33.7 | $26.5 | | General & Administrative | $3.2 | $3.2 | $9.4 | $9.2 | | Total Operating Expenses | $13.5 | $12.5 | $43.1 | $35.7 | - The increase in R&D expenses for the nine-month period was primarily due to higher personnel costs ($1.8M), stock-based compensation ($1.1M), manufacturing activities ($2.9M), new trial start-up costs ($0.4M), and expanded enrollment in the EXCELLENCE trial ($1.6M)[163] Net Loss Summary | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Nine Months Ended June 30, 2023 ($M) | Nine Months Ended June 30, 2022 ($M) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(11.3M) | $(12.4M) | $(37.4M) | $(33.7M) | | Loss Per Share | $(0.14) | $(0.16) | $(0.47) | $(0.44) | Liquidity and Capital Resources The company's cash and cash equivalents increased to $154.8 million, supported by a $150 million purchase agreement with Lincoln Park Capital, ensuring sufficient funding Working Capital Summary | Account | June 30, 2023 ($) | September 30, 2022 ($) | | :--- | :--- | :--- | | Current Assets | $157,809,863 | $152,704,603 | | Current Liabilities | $11,055,267 | $10,213,561 | | Working Capital | $146,754,596 | $142,491,042 | - Cash and cash equivalents increased to $154.8 million at June 30, 2023, from $149.2 million at September 30, 2022, driven by $27.6 million in financing activities, partially offset by $21.9 million used in operations[167][178] - On February 3, 2023, the company entered into a $150 million purchase agreement with Lincoln Park Capital Fund, LLC, with $123.3 million remaining available as of June 30, 2023[179][184] - No shares were sold under the Controlled Equity Offering Sales Agreement during the nine months ended June 30, 2023, unlike the prior year period which raised $21.0 million in gross proceeds[187] Quantitative and Qualitative Disclosures About Market Risks The company reports no material changes in its market risk exposure since the Annual Report on Form 10-K for the fiscal year ended September 30, 2022 - There have been no material changes in the company's market risk exposure since its last annual report[192] Controls and Procedures As of June 30, 2023, disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and principal financial officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[194] - No changes to internal control over financial reporting occurred during the quarter ended June 30, 2023, that have materially affected or are likely to materially affect internal controls[195] PART II – OTHER INFORMATION Legal Proceedings The company reports no material pending legal proceedings beyond routine litigation incidental to its business - The company is not aware of any material pending legal proceedings[197] Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022 - No material changes have occurred to the risk factors disclosed in the company's 2022 Form 10-K[198] Other Part II Items The company reported no unregistered equity sales, defaults on senior securities, or mine safety disclosures for the period - The company reports no unregistered sales of equity securities, defaults upon senior securities, mine safety disclosures, or other information for the period[199] Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes a list of filed exhibits, such as officer certifications (31.1, 31.2, 32.1) and XBRL interactive data files (101 series)[201] Signatures - The report was duly signed and authorized on August 8, 2023, by Christopher Missling, PhD, Chief Executive Officer, and Sandra Boenisch, CPA, CGA, Principal Financial Officer[203][204]