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What changed in ANAVEX LIFE SCIENCES CORP.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ANAVEX LIFE SCIENCES CORP.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+293 added−251 removedSource: 10-K (2023-11-27) vs 10-K (2022-11-28)

Top changes in ANAVEX LIFE SCIENCES CORP.'s 2023 10-K

293 paragraphs added · 251 removed · 216 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

107 edited+37 added−12 removed226 unchanged
Biggest changeAll patients who participate in the trial will be eligible to receive ANAVEX ® 2-73 under a voluntary open label extension protocol, which is currently ongoing. Parkinson’s Disease In September 2016, we presented positive preclinical data for ANAVEX ® 2-73 in an animal model of Parkinson’s disease, which demonstrated significant improvements on behavioral, histopathological, and neuroinflammatory endpoints.
Biggest changeThis trial completed enrollment in February 2023, exceeding the original enrollment target. In June 2023, this trial completed dosing of all participants, and topline results are expected in the second half of 2023. All patients who participate in the trial will be eligible to receive ANAVEX ® 2-73 under a voluntary open label extension protocol, which is currently ongoing.
The data demonstrated dose related and significant improvements in an array of behavioral and gait paradigms in a mouse model with a MECP2-null mutation that causes neurological symptoms that mimic Rett syndrome. The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”).
The data demonstrated dose related and significant improvements in an array of behavioral and gait paradigms in a mouse model with an MECP2-null mutation that causes neurological symptoms that mimic Rett syndrome. The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”).
The Parkinson’s disease market is expected to reach to $11.5 billion by 2029, according to GlobalData. ● Rett syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.
The Parkinson’s disease market is expected to reach $11.5 billion by 2029, according to GlobalData. ● Rett syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.
In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs.
In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs.
In order to validate the ability of our compounds to activate quantitatively the SIGMAR1, we performed, in collaboration with Stanford University, a quantitative Positron Emission Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ® 2-73 target engagement or receptor occupancy with SIGMAR1 in the brain. 6 Source: Reyes S et al., Sci Rep. 2021 Aug 25;11(1):17150 Cellular Homeostasis Many diseases are possibly directly caused by chronic homeostatic imbalances or cellular stress of brain cells.
In order to validate the ability of our compounds to activate quantitatively the SIGMAR1, we performed, in collaboration with Stanford University, a quantitative Positron Emission Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ® 2-73 (blarcamesine) target engagement or receptor occupancy with SIGMAR1 in the brain. 6 Source: Reyes S et al., Sci Rep. 2021 Aug 25;11(1):17150 Cellular Homeostasis Many diseases are possibly directly caused by chronic homeostatic imbalances or cellular stress of brain cells.
Our lead product candidate, ANAVEX ® 2-73, is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”). We currently have two core programs and two seed programs.
Our lead product candidate, ANAVEX ® 2-73 (blarcamesine), is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”). We currently have two core programs and two seed programs.
In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs. 27 18 U.S.C. § 287 establishes criminal liability for whoever knowingly makes or presents a false, fictitious or fraudulent claim to the United States Government, including any department or agency thereof.
In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs. 18 U.S.C. § 287 establishes criminal liability for whoever knowingly makes or presents a false, fictitious or fraudulent claim to the United States Government, including any department or agency thereof.
The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73, which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides support for the potential precision medicine clinical development of ANAVEX ® 2-73 by using genetic biomarkers identified within the trial population itself to target patients who are most likely to respond to ANAVEX ® 2-73 treatment.
The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73 (blarcamesine), which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides support for the potential precision medicine clinical development of ANAVEX ® 2-73 (blarcamesine) by using genetic biomarkers identified within the trial population itself to target patients who are most likely to respond to ANAVEX ® 2-73 (blarcamesine) treatment.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. 22 The Food and Drug Administration Safety and Innovation Act (“FDASIA”) established a category of drugs referred to as “breakthrough therapies” that may be eligible to receive breakthrough therapy designation.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. The Food and Drug Administration Safety and Innovation Act (“FDASIA”) established a category of drugs referred to as “breakthrough therapies” that may be eligible to receive breakthrough therapy designation.
ANAVEX ® 1037 is currently in the pre-clinical and clinical testing stages of development, and there is no guarantee that the activity demonstrated in pre-clinical models will be shown in human testing. 14 We continue to identify and initiate discussions with potential strategic and commercial partners to most effectively advance our programs and increase stockholder value.
ANAVEX ® 1037 is currently in the pre-clinical and clinical testing stages of development, and there is no guarantee that the activity demonstrated in pre-clinical models will be shown in human testing. We continue to identify and initiate discussions with potential strategic and commercial partners to most effectively advance our programs and increase stockholder value.
These drugs then generally can be substituted by pharmacists under prescriptions written for the original listed drug. 23 A 505(b)(2) application is a type of NDA that relies, in part, upon data the applicant does not own and to which it does not have a right of reference.
These drugs then generally can be substituted by pharmacists under prescriptions written for the original listed drug. A 505(b)(2) application is a type of NDA that relies, in part, upon data the applicant does not own and to which it does not have a right of reference.
While no agreement offers absolute protection, such agreements provide some form of recourse in the event of disclosure, or anticipated disclosure. Our intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions for which important legal principles are unresolved.
While no agreement offers absolute protection, such agreements provide some form of recourse in the event of disclosure, or anticipated disclosure. 19 Our intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions for which important legal principles are unresolved.
An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. The Pediatric Research Equity Act (“PREA”), requires IND sponsors to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.
An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. 22 The Pediatric Research Equity Act (“PREA”), requires IND sponsors to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.
The clinical trials are being conducted in a range of patient age demographics and geographic regions, utilizing an oral liquid once-daily formulation of ANAVEX ® 2-73. The first Phase 2 trial, (ANAVEX®2-73-RS-001), which took place in the United States, was completed in December 2020.
The clinical trials are being conducted in a range of patient age demographics and geographic regions, utilizing an oral liquid once-daily formulation of ANAVEX ® 2-73. 9 The first Phase 2 trial, (ANAVEX ® 2-73-RS-001), which took place in the United States, was completed in December 2020.
Administration of ANAVEX ® 2-73 resulted in both significant and dose related improvements in an array of these behavioral paradigms in the MECP2 HET Rett syndrome disease model. In May 2016 and June 2016, the FDA granted Orphan Drug Designation to ANAVEX ® 2-73 for the treatment of Rett syndrome and infantile spasms, respectively.
Administration of ANAVEX ® 2-73 resulted in both significant and dose related improvements in an array of these behavioral paradigms in the MECP2 HET Rett syndrome disease model. 12 In May 2016 and June 2016, the FDA granted Orphan Drug Designation to ANAVEX ® 2-73 for the treatment of Rett syndrome and infantile spasms, respectively.
Prices at which we or our customers seek reimbursement for our therapeutic compounds can be subject to challenge, reduction or denial by payors. 25 The process for determining whether a payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product.
Prices at which we or our customers seek reimbursement for our therapeutic compounds can be subject to challenge, reduction or denial by payors. The process for determining whether a payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product.
Two consecutive trial extensions for the Phase 2a trial have allowed participants who completed the 52-week Part B of the trial to continue taking ANAVEX ® 2-73, providing us an opportunity to gather extended safety data for a cumulative time period of five years.
Two consecutive trial extensions for the Phase 2a trial have allowed participants who completed the 52-week Part B of the trial to continue taking ANAVEX ® 2-73, providing an opportunity to gather extended safety data for a cumulative time period of five years.
Any of the consequences contained in this paragraph and section could adversely affect the ability to operate the business, financial condition, and the results of operations. 28 Sunshine Act The Sunshine Act requires manufacturers of products reimbursed by Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”) to collect and annually report detailed data to the Centers for Medicare and Medicaid Services (“CMS”) regarding payments or other transfers of value to physicians, certain other health care providers (such as physicians assistants and nurse practitioners), and teaching hospitals (“covered recipients”), as well as any ownership or investment interest held by physicians and their immediate family members.
Any of the consequences contained in this paragraph and section could adversely affect the ability to operate the business, financial condition, and the results of operations. 30 Sunshine Act The Sunshine Act requires manufacturers of products reimbursed by Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”) to collect and annually report detailed data to the Centers for Medicare and Medicaid Services (“CMS”) regarding payments or other transfers of value to physicians, certain other health care providers (such as physicians assistants and nurse practitioners), and teaching hospitals (“covered recipients”), as well as any ownership or investment interest held by physicians and their immediate family members.
We believe there is an urgent and unmet need for both a disease modifying cure for Alzheimer’s disease as well as for better symptomatic treatments. ● Parkinson’s disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.
We believe that there is an urgent and unmet need for both a disease-modifying cure for Alzheimer’s disease as well as for better symptomatic treatments. ● Parkinson’s disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.
A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 and COMT, a gene involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73-specific biomarker hypothesis.
A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 (blarcamesine) and COMT, a gene involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73 (blarcamesine)-specific biomarker hypothesis.
Companion studies in rats demonstrated the lack of any effects on normal gastrointestinal transit with ANAVEX ® 1066 and a favorable safety profile in a battery of behavioral measures. ANAVEX ® 1037 ANAVEX ® 1037 is designed for the treatment of prostate and pancreatic cancer.
Companion studies in rats demonstrated the lack of any effects on normal gastrointestinal transit with ANAVEX ® 1066 and a favorable safety profile in a battery of behavioral measures. 15 ANAVEX ® 1037 ANAVEX ® 1037 is designed for the treatment of prostate and pancreatic cancer.
ANAVEX ® 2-73 normalization of BDNF expression could be a contributing factor for the positive data observed in both neurodevelopmental and neurodegenerative disorders like Angelman and Fragile X syndromes.
ANAVEX ® 2-73 normalization of BDNF expression could be a contributing factor for the positive preclinical data observed in both neurodevelopmental and neurodegenerative disorders like Angelman and Fragile X syndromes.
Treatment with ANAVEX ® 2-73 also resulted in clinically meaningful improvements as measured by the global composite score of Parkinson’s disease symptom severity, MDS-Unified Parkinson’s Disease Rating Scale total score on top of standard of care including dopaminergic therapy, levodopa and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX ® 2-73’s potential capability of slowing and reversing symptoms that progress in Parkinson’s disease.
Treatment with ANAVEX ® 2-73 also resulted in clinically meaningful improvements as measured by the global composite score of Parkinson’s disease symptom severity, MDS-Unified Parkinson’s Disease Rating Scale (“MDS-UPDRS”) total score on top of standard of care including dopaminergic therapy, levodopa and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX ® 2-73’s potential capability of slowing and reversing symptoms that progress in Parkinson’s disease.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. 29 Research and Development Expenses Historically, a significant portion of our operating expenses has related to research and development.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. 31 Research and Development Expenses Historically, a significant portion of our operating expenses has related to research and development.
See our Consolidated Financial Statements contained elsewhere in this Annual Report for costs and expenses related to research and development, and other financial information for fiscal years 2022, 2021 and 2020. Scientific Advisors We are advised by scientists and physicians with experience relevant to our Company and our product candidates.
See our Consolidated Financial Statements contained elsewhere in this Annual Report for costs and expenses related to research and development, and other financial information for fiscal years 2023, 2022 and 2021. Scientific Advisors We are advised by scientists and physicians with experience relevant to our Company and our product candidates.
ANAVEX ® 2-73 demonstrated significant improvements in all of these indications in the respective preclinical animal models. 12 In a preclinical study sponsored by the Foundation for Angelman Syndrome, ANAVEX ® 2-73 was assessed in a mouse model for the development of audiogenic seizures. The results indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures.
ANAVEX ® 2-73 demonstrated significant improvements in all of these indications in the respective preclinical animal models. In a preclinical study sponsored by the Foundation for Angelman Syndrome, ANAVEX ® 2-73 was assessed in a mouse model for the development of audiogenic seizures. The results indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures in mice.
This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. The second of these three patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.
This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. The second of these four patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.
The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial. 11 The trial demonstrated that ANAVEX ® 2-73 was safe and well tolerated in oral doses up to 50 mg once daily.
The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial. 10 The trial demonstrated that ANAVEX ® 2-73 was safe and well tolerated in oral doses up to 50 mg once daily.
The first of these two patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose anti-epilepsy drug combined with either: (i) ANAVEX ® 2-73 and its active metabolite ANAVEX ® 19-144; or (ii) ANAVEX ® 19-144.
The first of these three patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose anti-epilepsy drug combined with either: (i) ANAVEX ® 2-73 and its active metabolite ANAVEX ® 19-144; or (ii) ANAVEX ® 19-144.
Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions. Employees We currently have approximately thirty-eight full-time employees, and we retain several independent contractors on a regular or as-needed basis. We believe that we have good relations with our employees. Available Information Our internet website address is www.anavex.com .
Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions. Employees We currently have approximately forty full-time employees, and we retain several independent contractors on a regular or as-needed basis. We believe that we have good relations with our employees. Available Information Our internet website address is www.anavex.com.
We own three issued U.S. patents each with claims directed to crystalline forms of ANAVEX ® 2-73. The first of these three patents claims crystalline forms of ANAVEX ® 2-73, dosage forms and compositions containing crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using them.
We own four issued U.S. patents each with claims directed to crystalline forms of ANAVEX ® 2-73. The first of these four patents claims crystalline forms of ANAVEX ® 2-73, dosage forms and compositions containing crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using them.
We believe the results of these clinical trials and preclinical study could serve as the basis for advancing into respective registration studies in the U.S. 10 Our Pipeline Our research and development pipeline includes ANAVEX ® 2-73 currently in three different clinical trial indications, and several other compounds in different stages of clinical and pre-clinical development.
We believe the results of these clinical trials and preclinical study could serve as a basis for advancing into respective registration trials in the U.S. Our Pipeline Our research and development pipeline includes ANAVEX ® 2-73 currently in three different clinical trial indications, and several other compounds in different stages of clinical and pre-clinical development.
In addition, preclinical data to-date also indicates that ANAVEX ® 2-73 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.
In addition, preclinical data to-date also indicates that ANAVEX ® 2-73 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, may play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available there free of charge.
The sponsor must also include a protocol detailing, among other things, the objectives of the first phase of clinical trials, the parameters to be used in monitoring the safety of the trial, and the effectiveness criteria to be evaluated should the first phase lend itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is filed.
The sponsor must also include a protocol detailing, among other things, the objectives of the clinical trials, the parameters to be used in monitoring the safety of the trial, and the effectiveness criteria to be evaluated should the trial include an efficacy evaluation. Some preclinical testing may continue even after the IND is filed.
ANAVEX ® 2-73 treatment resulted in a sustained improvement in Clinical Global Impression Improvement (“CGI-I”) response throughout the 7-week clinical trial, when compared to placebo in the ITT cohort (all participants, p = 0.014).
ANAVEX ® 2-73 treatment resulted in a sustained improvement in Clinical Global Impression Improvement (CGI-I) response throughout the 7-week clinical trial, when compared to placebo in the ITT cohort (all participants, p = 0.014).
The second patent claims methods for treating or preventing pain using (-) ANAVEX ® 1066 isomer. Both patents are expected to expire in November 2036, absent any patent term extension for regulatory delays.
The first of these two patents claims methods for treating or preventing pain using (+) ANAVEX ® 1066 isomer. The second patent claims methods for treating or preventing pain using (-) ANAVEX ® 1066 isomer. Both patents are expected to expire in November 2036, absent any patent term extension for regulatory delays.
This patent is expected to expire in June 2037, absent any patent term extension for regulatory delays. The third of these three patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.
This patent is expected to expire in June 2036, absent any patent term extension for 18 regulatory delays. The third of these four patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.
We believe preclinical data from our studies also supports ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative diseases beyond Alzheimer’s disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms, Fragile X syndrome, Angelman syndrome, multiple sclerosis and, more recently, tuberous sclerosis complex (TSC).
We believe preclinical data from our studies also supports further research into the use of ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative diseases beyond Alzheimer’s disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms, Fragile X syndrome, Angelman syndrome, multiple sclerosis, and, more recently, tuberous sclerosis complex (TSC).
The Phase 2 trial enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses, 30 mg and 50 mg, or placebo. The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial.
The Phase 2 trial enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses, 30mg and 50mg, or placebo. The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial.
In November 2016, we completed a Phase 2a clinical trial for ANAVEX ® 2-73, for the treatment of Alzheimer’s disease. The open-label randomized trial was designed to assess the safety and exploratory efficacy of ANAVEX ® 2-73 in 32 patients with mild-to-moderate Alzheimer’s disease. The Phase 2a trial met both primary and secondary objectives of the trial.
In November 2016, we completed a Phase 2a clinical trial for ANAVEX ® 2-73, for the treatment of Alzheimer’s disease. The open-label randomized trial was designed to assess the safety and exploratory efficacy of ANAVEX ® 2-73 in 32 patients with mild-to-moderate Alzheimer’s disease.
For additional discussion of the risks related to competition, see Item 1A “Risk Factors.” 16 Patents, Trademarks and Intellectual Property We hold ownership or exclusive rights to seventeen U.S. patents, nineteen U.S. patent applications, and various PCT or ex-U.S. patent applications relating to our drug candidates, methods associated therewith, and to our research programs.
For additional discussion of the risks related to competition, see Item 1A “Risk Factors.” Patents, Trademarks and Intellectual Property We hold ownership or exclusive rights to twenty-two U.S. patents, twenty-three U.S. patent applications, and various PCT or ex-U.S. patent applications relating to our drug candidates, methods associated therewith, and to our research programs.
Fraud and Abuse Laws Federal and state health care laws and regulations restrict business practices in the biopharmaceutical industry. In the biopharmaceutical industry, there are a number of federal and state health care regulatory requirements that apply to entities, including, but not limited to, the federal and state fraud and abuse laws.
In the biopharmaceutical industry, there are a number of federal and state health care regulatory requirements that apply to entities, including, but not limited to, the federal and state fraud and abuse laws.
All three patents are expected to expire in January 2037, absent any patent term extension for regulatory delays. In addition, we own one issued U.S. Patent with claims directed to methods of treating melanoma with a compound related to ANAVEX ® 2-73. This patent is expected to expire in February 2030, absent any patent term extension for regulatory delays.
In addition, we own one issued U.S. Patent with claims directed to methods of treating melanoma with a compound related to ANAVEX ® 2-73. This patent is expected to expire in February 2030, absent any patent term extension for regulatory delays.
A violation of the Federal Anti-Kickback Statute can serve as a false or fraudulent claim for purposes of the civil False Claims Act and the civil monetary penalties statute. 26 The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) among other things, enacted numerous provisions that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) among other things, enacted numerous provisions that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical treatment of pancreatic cancer will increase from $2.59 billion in 2022 to $3.73 billion by 2027. Competition The drug discovery and development industry is very competitive, characterized by rapid advancements in technology, where protection of proprietary advancements is essential.
Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical treatment of pancreatic cancer will increase to $3.7 billion by 2027. 17 Competition The drug discovery and development industry is very competitive, characterized by rapid advancements in technology, where protection of proprietary advancements is essential.
The trial took place in Australia and was a double-blind, randomized, placebo-controlled, Phase 1 trial to evaluate safety and tolerability, and PK of oral escalating doses of ANAVEX ® 3-71 including effects of food and gender in healthy volunteers.
In July 2020, we commenced the first Phase 1 clinical trial of ANAVEX ® 3-71. The trial took place in Australia and was a double-blind, randomized, placebo-controlled, Phase 1 trial to evaluate safety and tolerability, and PK of oral escalating doses of ANAVEX ® 3-71 including effects of food and gender in healthy volunteers.
Additional preclinical data presented also indicates that in addition to reducing oxidative stress, ANAVEX ® 3-71 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases. 13 In July 2020, we commenced the first Phase 1 clinical trial of ANAVEX ® 3-71.
Additional preclinical data presented also indicates that in addition to reducing oxidative stress, ANAVEX ® 3-71 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.
Our core programs are at various stages of clinical and preclinical development, in neurodegenerative and neurodevelopmental diseases. The following table summarizes key information about our programs: * = Orphan Drug Designation by the FDA; Dashed lines indicate planned clinical trials to-date Anavex has a portfolio of compounds varying in sigma-1 receptor (SIGMAR1) binding activities.
Our core programs are at various stages of clinical and preclinical development, in neurodegenerative and neurodevelopmental diseases. The following table summarizes key information about our programs: * = Orphan Drug Designation by the FDA; 1. EXCELLENCE: Ongoing trial Anavex has a portfolio of compounds varying in sigma-1 receptor (SIGMAR1) binding activities.
The trial demonstrated that ANAVEX ® 2-73 was safe and well tolerated in oral doses up to 50 mg once daily. The results showed clinically meaningful, dose-dependent, and statistically significant improvements in the Cognitive Drug Research (“CDR”) computerized assessment system analysis.
The trial demonstrated that ANAVEX ® 2-73 was safe and well tolerated in oral doses up to 50mg once daily. The results showed clinically meaningful, dose-dependent, and statistically significant improvements in the CDR computerized assessment system analysis.
We regard patents and other intellectual property rights as corporate assets. Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy including the selective development, protection, and exploitation of our intellectual property rights.
Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy including the selective development, protection, and exploitation of our intellectual property rights.
During pathological conditions ANAVEX ® 3-71 demonstrated the formation of new synapses between neurons (synaptogenesis) without causing an abnormal increase in the number of astrocytes. In neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease, synaptogenesis is believed to be impaired.
In April 2016, the FDA granted Orphan Drug Designation to ANAVEX ® 3-71 for the treatment of FTD. During pathological conditions ANAVEX ® 3-71 demonstrated the formation of new synapses between neurons (synaptogenesis) without causing an abnormal increase in the number of astrocytes. In neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease, synaptogenesis is believed to be impaired.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
Before approving an NDA, the FDA will also inspect the facility where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
While the IND is active, progress reports summarizing the results of ongoing clinical trials and nonclinical studies performed since the last progress report must be submitted on at least an annual basis to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important, increased incidence of a serious adverse reaction compared to that listed in the protocol or investigator brochure.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate the effectiveness of the packaging and that the compound does not undergo unacceptable deterioration over its shelf life. 21 While the IND is active, progress reports summarizing the results of ongoing clinical trials and nonclinical studies performed since the last progress report must be submitted on at least an annual basis to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important, increased incidence of a serious adverse reaction compared to that listed in the protocol or investigator brochure.
Additionally, we or our collaborators may develop companion diagnostic tests for use with our product candidates. Companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics.
Additionally, we or our collaborators may develop companion diagnostic tests for use with our product candidates. Companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products.
The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” 42 U.S.C. § 1395nn, prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
These provisions include 18 U.S.C. §§ 286, 287, 669, 1035, 1347, and 1518, all as described further below. 28 The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” 42 U.S.C. § 1395nn, prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
In January 2017, we were awarded a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter Phase 2 clinical trial of ANAVEX ® 2-73 for the treatment of Rett syndrome.
In January 2017, we were awarded a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter Phase 2 clinical trial of ANAVEX ® 2-73 for the treatment of Rett syndrome. This award was received in quarterly instalments which commenced during fiscal 2018.
Such applications often are submitted for changes to previously approved drug products, and rely on the FDA’s prior findings of safety and effectiveness for a third party’s NDA to abbreviate the showings the sponsor of the 505(b)(2) application must make to establish that its product is safe and effective.
Such applications often are submitted for changes to previously approved drug products, and rely on the FDA’s prior findings of safety and effectiveness for a third party’s NDA to abbreviate the showings the sponsor of the 505(b)(2) application must make to establish that its product is safe and effective. 25 The ANDA or 505(b)(2) applicant is required to certify to FDA concerning any patents listed for the referenced approved drug in FDA’s Orange Book.
Orphan drug designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product.
However, even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. 24 Orphan drug designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product.
The Federal False Claims Act, 31 U.S.C. § 3729, et seq., provides, in part, that the federal government—or a private party on behalf of the government—may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent claim for payment, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government or who has knowingly retained an overpayment.
In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs. 29 The Federal False Claims Act, 31 U.S.C. § 3729, et seq., provides, in part, that the federal government—or a private party on behalf of the government—may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent claim for payment, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government or who has knowingly retained an overpayment.
Sponsors typically use the meetings at the end of the Phase 2 trials to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug.
Sponsors typically use the meetings at the end of the Phase 2 trials to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug. Meetings at other times may be made upon request and are subject to approval by the FDA.
Meetings at other times may be made upon request and are subject to approval by the FDA. 19 Concurrent with clinical trials, companies typically complete additional, animal or other non-clinical studies, develop additional information about the chemistry and physicochemical characteristics of the drug, and finalize a process for manufacturing the product in commercial quantities in accordance with the FDA’s current Good Manufacturing Practices (“cGMP”) requirements.
Concurrent with clinical trials, companies typically complete additional, animal or other non-clinical studies, develop additional information about the chemistry and physicochemical characteristics of the drug, and finalize a process for manufacturing the product in commercial quantities in accordance with the FDA’s current Good Manufacturing Practices (“cGMP”) requirements.
The treatment includes surgical removal of the tumor, adjuvant treatment, chemo and immunotherapy, or radiation therapy. According to iHealthcareAnalyst, Inc. the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029. ● Prostate Cancer – Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.
According to iHealthcareAnalyst, Inc. the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029. ● Prostate Cancer – Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.
According to the Centers for Disease Control and Prevention, in 2015 epilepsy affected 3.4 million Americans. Today, epilepsy is often controlled, but not cured, with medication that is categorized as older traditional anti-epileptic drugs and second generation anti-epileptic drugs.
These seizures are transient signs and/or symptoms of abnormal, excessive or synchronous neuronal activity in the brain. According to the Centers for Disease Control and Prevention, in 2015 epilepsy affected 3.4 million Americans. Today, epilepsy is often controlled, but not cured, with medication that is categorized as older traditional anti-epileptic drugs and second generation anti-epileptic drugs.
Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA. The issuance of a written request does not require the sponsor to undertake the described clinical trials.
Pediatric exclusivity is another type of marketing exclusivity available in the United States. Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA.
United States Patent Term Restoration Depending upon the timing, duration and specifics of FDA approval of our future product candidates, some of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
In addition, orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances. 26 United States Patent Term Restoration Depending upon the timing, duration and specifics of FDA approval of our future product candidates, some of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
Clinical trial sites in Canada, the United Kingdom, the Netherlands and Germany were also added. This Phase 2b/3 trial design incorporates inclusion of genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a trial. The Phase 2b/3 trial, which has completed enrollment, randomized 1:1:1 to either two different ANAVEX ® 2-73 doses or placebo.
Clinical trial sites in Canada, the United Kingdom, the Netherlands and Germany were also added. This Phase 2b/3 trial design incorporates inclusion of genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a trial.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether and under what conditions the application should be approved.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether and under what conditions the application should be approved. The FDA is not bound by the recommendations of such an advisory committee, but it considers advisory committee recommendations carefully when making decisions.
The analysis identified genetic variants that impacted response to ANAVEX ® 2-73, among them variants related to the SIGMAR1, the target for ANAVEX ® 2-73. Results showed that trial participants with the common SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive (MMSE) and the functional (ADCS-ADL) scores.
Results showed that trial participants with the common SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive (MMSE) and functional (ADCS-ADL) scores.
Manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations. 21 Any drug product manufactured or distributed by us pursuant to FDA approval will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.
Any drug product manufactured or distributed by us pursuant to FDA approval will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.
The FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-marketing clinical trials, enforcement letters, import refusals, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.
The FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-marketing clinical trials, enforcement letters, import refusals, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. 23 Expedited development and review programs The FDA has a fast track designation program that is intended to expedite or facilitate the process for reviewing new drug products that meet certain criteria.
This award was received in quarterly instalments which commenced during fiscal 2018. 8 In March 2019, we commenced the first Phase 2 clinical trial in a planned Rett syndrome program of ANAVEX ® 2-73 for the treatment of Rett syndrome.
In March 2019, we commenced the first Phase 2 clinical trial in a planned Rett syndrome program of ANAVEX ® 2-73 for the treatment of Rett syndrome.
In October 2019, we initiated a long-term open label extension study of ANAVEX ® 2-73, entitled the ATTENTION-AD trial, for patients who have completed the 48-week Phase 2b/3 placebo-controlled trial referenced above. This trial extension for an additional two years gives patients the opportunity to continue their treatment.
A subsequent long-term open label extension study of ANAVEX ® 2-73, entitled the ATTENTION-AD trial was initiated for patients who have completed the 48-week Phase 2b/3 placebo-controlled trial referenced above.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. 24 Pediatric exclusivity is another type of marketing exclusivity available in the United States.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Our Target Indications We are developing compounds with potential application to two broad categories and several specific indications, including: Central Nervous System Diseases ● Alzheimer’s disease – In 2022, an estimated 6.5 million Americans were suffering from Alzheimer’s disease. The Alzheimer’s Association ® estimates that by 2050, this number is expected to rise to 12.7 million Americans.
Our Target Indications We are developing compounds with potential application to two broad categories and several specific indications, including: Central Nervous System Diseases ● Alzheimer’s disease – In 2023, an estimated 6.7 million Americans aged 65 and older are suffering from Alzheimer’s disease.
We believe that the encouraging results we have gathered in this preclinical model, coupled with the favorable profile of this product candidate in the Alzheimer’s disease trial, support the notion that ANAVEX ® 2-73 has the potential to treat Parkinson’s disease dementia. 9 In October 2020, we completed a double-blind, randomized, placebo-controlled proof-of-concept Phase 2 trial with ANAVEX ® 2-73 in Parkinson’s disease dementia in Spain and Australia, to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.
In October 2020, we completed a double-blind, randomized, placebo-controlled proof-of-concept Phase 2 trial with ANAVEX ® 2-73 in Parkinson’s disease dementia in Spain and Australia, to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.
ANAVEX ® 3-71 was previously granted orphan drug designation for the treatment of Frontotemporal Dementia (“FTD”) by the FDA. ANAVEX ® 3-71 is an orally administered small molecule targeting sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.
ANAVEX ® 3-71 is an orally administered small molecule targeting sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.
The results showed clinically meaningful, dose-dependent, and statistically significant improvements in the CDR computerized assessment system analysis. We anticipate conducting further clinical trials of ANAVEX ® 2-73 in Parkinson’s disease dementia after submitting the results of the trial to the FDA to obtain regulatory guidance.
We anticipate conducting further clinical trials of ANAVEX ® 2-73 in Parkinson’s disease dementia after submitting the results of the trial to the FDA to obtain regulatory guidance.
In addition to the primary endpoints, the ANAVEX ® 2-73 Phase 2b/3 trial design incorporated pre-specified statistical analyses related to potential genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a clinical trial. The trial completed enrollment in June 2021, exceeding the 450 patient enrollment target at 52 sites across Canada, Europe and Australia.
In addition to the primary endpoints, the ANAVEX ® 2-73 Phase 2b/3 trial design incorporated pre-specified statistical analyses related to potential genomic precision medicine biomarkers previously identified in the ANAVEX ® 2-73 Phase 2a clinical trial.
Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the ability to stop its onset or its progression.
The Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s and other dementias is projected to double by 2050. Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the ability to stop its onset or its progression.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
Biggest changeRaising funds at lower prices would severely dilute existing or future investors; 33 ● Our stock price has been volatile and may be volatile in the future and our common stock may become the target of a “short squeeze”; ● If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and/or commercial value of our patent rights are highly uncertain.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity and/or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad.
If a court decides that an Anavex compound, its method of manufacture or use, infringes on the competitor’s patent, we may have to pay substantial damages for infringement. 7. A court may prohibit us from making, selling or licensing the potential drug compound unless the patent holder grants a license. A patent holder is not required to grant a license.
If a court decides that an Anavex compound, its method of manufacture or use, infringes on a competitor’s patent, we may have to pay substantial damages for infringement. 7. A court may prohibit us from making, selling or licensing the potential drug compound unless the patent holder grants a license. A patent holder is not required to grant a license.
If we do not obtain required intellectual property licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these rights or licenses.
If we do not obtain required intellectual property licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these rights or licenses.
Such exceptions permit certain payments and arrangements that, although they would otherwise potentially implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific exceptions are met. ● HIPAA, which among other things, created additional federal criminal statutes that impose criminal and civil liability for, such actions as executing or attempting to execute a scheme to defraud any healthcare benefit program or knowingly and willingly falsifying, concealing or covering up a material fact or making false statements relating to healthcare matters; ● The privacy and security provisions of HIPAA, which impose certain requirements on covered entities and their business associates, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● U.S. federal transparency requirements under the Physician Payments Sunshine Act, enacted as part of the Affordable Care Act that require applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and other transfers of value provided to physicians, certain other healthcare providers (such as physicians assistants and nurse practitioners),and teaching hospitals, as well as ownership and investment interests held by physicians or their immediate family members; and ● analogous state or foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements, state laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance efforts.
Such exceptions permit certain payments and arrangements that, although they would otherwise potentially implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific exceptions are met. ● HIPAA, which among other things, created additional federal criminal statutes that impose criminal and civil liability for, such actions as executing or attempting to execute a scheme to defraud any healthcare benefit program or knowingly and willingly falsifying, concealing or covering up a material fact or making false statements relating to healthcare matters; ● The privacy and security provisions of HIPAA, which impose certain requirements on covered entities and their business associates, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● U.S. federal transparency requirements under the Physician Payments Sunshine Act, enacted as part of the Affordable Care Act that require applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and other transfers of value provided to physicians, certain other healthcare providers (such as physicians assistants and nurse practitioners),and teaching hospitals, as well as ownership and investment interests held by physicians or their immediate family members; and 48 ● analogous state or foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements, state laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance efforts.
Accordingly, we are subject to risks related to operating in foreign countries, including: ● different standards of care in various countries that could complicate the evaluation of our product candidates; ● different United States and foreign drug import and export rules; ● reduced protection for intellectual property rights in certain countries; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; ● compliance with the FCPA and other anti-corruption and anti-bribery laws; ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; ● different payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; ● potential liability resulting from development work conducted by foreign partners; ● business interruptions resulting from natural disasters, outbreaks of contagious diseases, such as COVID-19, or geopolitical actions, including war and terrorism, or systems failure including cybersecurity breaches; and ● compliance with evolving and expansive foreign regulatory requirements, including data privacy laws (such as the GDPR).
Accordingly, we are subject to risks related to operating in foreign countries, including: ● different standards of care in various countries that could complicate the evaluation of our product candidates; ● different United States and foreign drug import and export rules; ● reduced protection for intellectual property rights in certain countries; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; ● compliance with the FCPA and other anti-corruption and anti-bribery laws; 46 ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; ● different payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; ● potential liability resulting from development work conducted by foreign partners; ● business interruptions resulting from natural disasters, outbreaks of contagious diseases, such as COVID-19, or geopolitical actions, including war and terrorism, or systems failure including cybersecurity breaches; and ● compliance with evolving and expansive foreign regulatory requirements, including data privacy laws (such as the GDPR).
Later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; ● fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; ● restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; ● product seizure or detention, or refusal to permit the import or export of our products; ● injunctions or the imposition of civil or criminal penalties; and ● refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals.
Later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; 44 ● fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; ● restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; ● product seizure or detention, or refusal to permit the import or export of our products; ● injunctions or the imposition of civil or criminal penalties; and ● refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals.
These include: ● the possibility that non-clinical testing or clinical trials may show that our potential drug compounds are ineffective and/or cause harmful side effects; ● regulators may not authorize us to commence or continue a clinical trial or may impose a clinical hold or may limit the conduct of a clinical trial through the imposition of a partial clinical hold; ● the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate; 31 ● our third-party contractors, including investigators, may fail to meet their contractual obligations to us in a timely manner, or at all, or may fail to comply with regulatory requirements; ● our potential drug compounds may prove to be too expensive to manufacture or administer to patients; ● our potential drug compounds may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities in a timely manner, or at all; ● even if our potential drug compounds are approved, we may not be able to produce them in commercial quantities or at reasonable costs; ● even if our potential drug compounds are approved, they may not achieve commercial acceptance; ● regulatory or governmental authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their commercial success; and ● the proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our potential drug compounds.
These include: ● the possibility that non-clinical testing or clinical trials may show that our potential drug compounds are ineffective and/or cause harmful side effects; 35 ● regulators may not authorize us to commence or continue a clinical trial or may impose a clinical hold or may limit the conduct of a clinical trial through the imposition of a partial clinical hold; ● the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate; ● our third-party contractors, including investigators, may fail to meet their contractual obligations to us in a timely manner, or at all, or may fail to comply with regulatory requirements; ● our potential drug compounds may prove to be too expensive to manufacture or administer to patients; ● our potential drug compounds may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities in a timely manner, or at all; ● even if our potential drug compounds are approved, we may not be able to produce them in commercial quantities or at reasonable costs; ● even if our potential drug compounds are approved, they may not achieve commercial acceptance; ● regulatory or governmental authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their commercial success; and ● the proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our potential drug compounds.
Our future operating and capital needs will depend on many factors, including: ● the pace of scientific progress in our research and development programs and the magnitude of these programs; ● the scope and results of pre-clinical testing and human clinical trials; ● the time and costs involved in obtaining regulatory approvals; ● the time and costs involved in preparing, filing, prosecuting, securing, maintaining and enforcing patents; ● competing technological and market developments; ● our ability to establish additional collaborations; ● changes in our existing collaborations; ● the cost of manufacturing scale -up; and ● the effectiveness of our commercialization activities.
Our future operating and capital needs will depend on many factors, including: ● the pace of scientific progress in our research and development programs and the magnitude of these programs; ● the scope and results of pre-clinical testing and human clinical trials; 36 ● the time and costs involved in obtaining regulatory approvals; ● the time and costs involved in preparing, filing, prosecuting, securing, maintaining and enforcing patents; ● competing technological and market developments; ● our ability to establish additional collaborations; ● changes in our existing collaborations; ● the cost of manufacturing scale-up; and ● the effectiveness of our commercialization activities.
We believe the following factors could cause the market price of our common stock to continue to fluctuate widely and could cause our common stock to trade at a price below the price at which you purchase your shares of common stock: ● actual or anticipated variations in our quarterly operating results; ● announcements of new services, products, acquisitions or strategic relationships by us or our competitors; ● changes in accounting treatments or principles; ● changes in earnings estimates by securities analysts and in analyst recommendations; and ● general political, economic, regulatory and market conditions.
We believe the following factors could cause the market price of our common stock to continue to fluctuate widely and could cause our common stock to trade at a price below the price at which you purchase your shares of common stock: ● actual or anticipated variations in our quarterly operating results; ● announcements of new services, products, acquisitions or strategic relationships by us or our competitors; 50 ● changes in accounting treatments or principles; ● changes in earnings estimates by securities analysts and in analyst recommendations; and ● general political, economic, regulatory and market conditions.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. 42 The coverage and reimbursement status of newly approved products is uncertain.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. The coverage and reimbursement status of newly approved products is uncertain.
Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
Nevertheless, we may not be granted patent term extension either in the United States 55 or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
Examples of problems that could arise include, among others: ● efficacy or safety concerns with the potential drug compounds, even if not justified; ● manufacturing difficulties or concerns; ● regulatory proceedings subjecting the potential drug compounds to potential recall; ● publicity affecting doctor prescription or patient use of the potential drug compounds; ● pressure from competitive products; or ● introduction of more effective treatments.
Examples of problems that could arise include, among others: ● efficacy or safety concerns with the potential drug compounds, even if not justified; ● manufacturing difficulties or concerns; ● regulatory proceedings subjecting the potential drug compounds to potential recall; 40 ● publicity affecting doctor prescription or patient use of the potential drug compounds; ● pressure from competitive products; or ● introduction of more effective treatments.
An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease the research and development of our technology. 48 Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize ANAVEX ® 2-73 or our other product candidates.
An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease the research and development of our technology. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize ANAVEX ® 2-73 or our other product candidates.
Furthermore, any loss or delay in obtaining contracts with such entities may also delay the completion of our clinical trials, regulatory filings and the potential market approval of our potential drug compounds. In addition, any of these third parties may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
Furthermore, any loss or delay in obtaining contracts with such entities may also delay the completion of our clinical trials, regulatory filings and the potential market approval of our potential drug compounds. 42 In addition, any of these third parties may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
Currently, the Company is outside of the binding three-year period with respect to OSF applicable to some of its programs being claimed in Australia. 40 To the extent that some or all of our research and development expenditures are deemed to be “ineligible,” then our refunds may decrease or be eliminated.
Currently, the Company is outside of the binding three-year period with respect to OSF applicable to some of its programs being claimed in Australia. To the extent that some or all of our research and development expenditures are deemed to be “ineligible,” then our refunds may decrease or be eliminated.
From the first human trial through to regulatory approval can take many years and 10-12 years is not unusual for certain compounds. 35 If any of our future clinical development potential drug compounds become the subject of problems, our ability to sustain our development programs will become critically compromised.
From the first human trial through to regulatory approval can take many years and 10-12 years is not unusual for certain compounds. If any of our future clinical development potential drug compounds become the subject of problems, our ability to sustain our development programs will become critically compromised.
The lack of patent protection in global markets for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less attractive to potential partners. 5. Defending a patent lawsuit takes significant time and can be very expensive. 6.
The lack of patent protection in global markets for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less attractive to potential partners. 54 5. Defending a patent lawsuit takes significant time and can be very expensive. 6.
Other companies have already begun many drug development programs, which may target diseases that we are also targeting, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities. 37 Universities and public and private research institutions also compete with us.
Other companies have already begun many drug development programs, which may target diseases that we are also targeting, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities. Universities and public and private research institutions also compete with us.
Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue. Significant uncertainty exists as to the coverage and reimbursement status of any compound for which we may seek regulatory approval.
Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue. 49 Significant uncertainty exists as to the coverage and reimbursement status of any compound for which we may seek regulatory approval.
These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Changes in patent law could diminish the value of our patents and patent applications in general, thereby impairing our ability to protect our product candidates.
These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 59 Changes in patent law could diminish the value of our patents and patent applications in general, thereby impairing our ability to protect our product candidates.
If this happens, our business will be adversely affected. 36 None of our potential drug compounds may reach the commercial market for a number of reasons and our business may fail. Successful research and development of pharmaceutical products is high risk. Most products and development candidates fail to reach the market.
If this happens, our business will be adversely affected. None of our potential drug compounds may reach the commercial market for a number of reasons and our business may fail. Successful research and development of pharmaceutical products is high risk. Most products and development candidates fail to reach the market.
Fast Track designation or breakthrough therapy designation may not actually lead to a faster FDA review and approval process. For some of our compounds, including ANAVEX ® 2-73, we hope to benefit from the FDA’s fast track and priority review programs.
Fast Track designation or breakthrough therapy designation may not actually lead to a faster FDA review and approval process. 38 For some of our compounds, including ANAVEX ® 2-73, we hope to benefit from the FDA’s fast track and priority review programs.
If a product that has orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. 34 We have received orphan drug designation for several of our compounds, but we may not be able to obtain or maintain orphan drug exclusivity in the United States for hose compounds.
If a product that has orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. 39 We have received orphan drug designation for several of our compounds, but we may not be able to obtain or maintain orphan drug exclusivity in the United States for hose compounds.
Our pending and future patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or which effectively prevent others from commercializing competitive product candidates.
Our pending and future patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or which could effectively prevent others from commercializing competitive product candidates.
During the year ended September 30, 2022, we determined that there were no changes in ownership pursuant to Section 382. We are subject to healthcare laws and regulations which may require substantial compliance efforts and could expose us to criminal sanctions, civil and administrative penalties, contractual damages, reputational harm and diminished profits and future earnings, among other penalties.
During the year ended September 30, 2023 and 2022, we determined that there were no changes in ownership pursuant to Section 382. 47 We are subject to healthcare laws and regulations which may require substantial compliance efforts and could expose us to criminal sanctions, civil and administrative penalties, contractual damages, reputational harm and diminished profits and future earnings, among other penalties.
This may seriously harm our business, financial condition and results of operations. 30 We are an early clinical stage pharmaceutical research and development company and may never be able to successfully develop marketable products or generate any revenue. We have a very limited relevant operating history upon which an evaluation of our performance and prospects can be made.
This may seriously harm our business, financial condition and results of operations. 34 We are an early clinical stage pharmaceutical research and development company and may never be able to successfully develop marketable products or generate any revenue. We have a very limited relevant operating history upon which an evaluation of our performance and prospects can be made.
Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request.
Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than what we request.
Moreover, we cannot be certain that our research and development efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sales to pharmaceutical companies or generate commercial revenues. We have no relevant operating history upon which an evaluation of our performance and prospects can be made.
Moreover, we cannot be certain that our research and development efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sale to pharmaceutical companies or generate commercial revenues. We have no relevant operating history upon which an evaluation of our performance and prospects can be made.
ITEM 1A. RISK FACTORS In addition to other information in this Annual Report on Form 10-K, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition.
In addition to other information in this Annual Report on Form 10-K, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition.
We may not be able to obtain patent protection for ANAVEX ® 2-73 as a single drug or in other jurisdictions. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation.
We may not be able to obtain broader scope patent protection for ANAVEX ® 2-73 as a single drug or in other jurisdictions. 53 The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation.
Moreover, we may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or the USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.
Moreover, we may be subject to a third-party pre-issuance submission of prior art to the United States Patent and Trademark Office, or the USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. Further, we may not be aware of all third-party intellectual property rights potentially relating to and/or interfering with our product candidates.
The market price for our common stock may be influenced by many factors, including the following: 43 ● announcements of new data, clinical trial results or those of companies that are perceived to be similar to us; ● announcements related to any delays in any preclinical or clinical trials related to our products; ● announcements related to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar announcements by companies that are perceived to be similar to us; ● our ability to meet or exceed expectations of analysts or investors; ● news that the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate; ● actions taken by regulatory agencies with respect to our product candidates or the progress of our clinical trials, including with respect to any fast track or orphan drug designations; ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors; ● grants awarded to us or companies that are perceived to be similar to us from outside entities; ● variations in our financial results or those of companies that are perceived to be similar to us; ● trading volume of our common stock; ● developments concerning our collaborations or partners; ● the impact of the COVID-19 outbreak and its effect on us; ● the perception of the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community; ● developments or disputes concerning intellectual property rights; ● significant lawsuits, including patent or stockholder litigation; ● our ability or inability to raise additional capital and the terms on which we raise it; ● sales of our common stock by us or our stockholders; ● declines in the market prices of stocks generally or of companies that are perceived to be similar to us; and ● general economic, industry and market conditions. 44 In addition, companies trading in the stock market in general, and The Nasdaq Capital Market in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
The market price for our common stock may be influenced by many factors, including the following: ● announcements of new data, clinical trial results or those of companies that are perceived to be similar to us; ● announcements related to any delays in any preclinical or clinical trials related to our products; ● announcements related to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar announcements by companies that are perceived to be similar to us; ● our ability to meet or exceed expectations of analysts or investors; ● news that the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate; ● actions taken by regulatory agencies with respect to our product candidates or the progress of our clinical trials, including with respect to any fast track or orphan drug designations; 51 ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors; ● grants awarded to us or companies that are perceived to be similar to us from outside entities; ● variations in our financial results or those of companies that are perceived to be similar to us; ● trading volume of our common stock; ● developments concerning our collaborations or partners; ● the impact of the COVID-19 outbreak and its effect on us; ● the perception of the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community; ● developments or disputes concerning intellectual property rights; ● significant lawsuits, including patent or stockholder litigation; ● our ability or inability to raise additional capital and the terms on which we raise it; ● sales of our common stock by us or our stockholders; ● declines in the market prices of stocks generally or of companies that are perceived to be similar to us; and ● general economic, industry and market conditions.
Risks Related to our Company We have had a history of losses and no revenue, which raises a risk regarding our ability to continue as a going concern in the future. Since inception through September 30, 2022, we have accumulated a deficit of approximately $246 million.
Risks Related to our Company We have had a history of losses and no revenue, which raises a risk regarding our ability to continue as a going concern in the future. Since inception through September 30, 2023, we have accumulated a deficit of approximately $293 million.
Although we are not currently involved in any litigation, if we were to initiate legal proceedings against a third party to enforce a patent covering ANAVEX ® 2-73 or our other product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable.
Competitors may infringe our patents or other intellectual property. Although we are not currently involved in any litigation, if we were to initiate legal proceedings against a third party to enforce a patent covering ANAVEX ® 2-73 or our other product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable.
Our subsidiary is eligible to participate in the Australian Federal Government’s Research and Development Tax Incentive program, under which the government provides a cash refund for a portion of eligible research and development expenditures (currently 43.5% to 48.5% depending on the entity’s corporate tax rate) by small Australian entities, which are defined as Australian entities with less than $20 million (Australian) in revenue.
Our subsidiary is eligible to participate in the Australian Federal Government’s Research and Development Tax Incentive program, under which the government provides a cash refund for a portion of eligible research and development expenditures (currently 43.5% to 48.5% depending on the entity’s corporate tax rate) by small Australian entities, which are defined as Australian entities with less than $20 million (Australian) in revenue. 45 The Research and Development Tax Incentive refund is offered by the Australian federal government for eligible research and development purposes based on the filing of an annual application.
Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all.
We may not be able to generate significant revenues for several years, if at all. Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all.
If our competitors succeed in developing products and technologies faster or that are more effective or with a better profile than our own, or if scientific developments change our understanding of the potential scope and utility of our potential products, then our technologies and future products may be rendered undesirable or obsolete.
If this happens, our business will be adversely affected. 41 If our competitors succeed in developing products and technologies faster or that are more effective or with a better profile than our own, or if scientific developments change our understanding of the potential scope and utility of our potential products, then our technologies and future products may be rendered undesirable or obsolete.
Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
To date, we have funded our operations primarily through private placement of our equity securities, grants and our “at the market offering” in connection with an Amended and Restated Sales Agreement, dated May 1, 2020, with Cantor Fitzgerald & Co. and SVB Leerink LLC (the “Sales Agents”), pursuant to which we may offer and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents.
To date, we have funded our operations primarily through private placement of our equity securities, and grants or draws under our “at the market offering” in connection with an Amended and Restated Sales Agreement, dated May 1, 2020, with Cantor Fitzgerald & Co. and SVB Leerink LLC (the “Sales Agents”), pursuant to which we may offer and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents or the through the Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to which the Company may direct Lincoln Park to purchase shares of common stock registered under an effective registration statement.
If none of our potential drug compounds reach the commercial market, our business will likely fail and investors will lose all of their investment in our Company. If this happens, our business will be adversely affected.
If none of our potential drug compounds reach the commercial market, our business will likely fail and investors will lose all of their investment in our Company.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those diligence obligations; ● the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and ● the priority of invention of patented technology.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those diligence obligations; ● the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and ● the priority of invention of patented technology. 56 In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
Our ability to use our net operating loss (“NOL”) carryforwards and certain tax credit carryforwards may be subject to limitation. As of September 30, 2022, we had $123.4 million of U.S. federal and $199.0 million of state and local NOL carryforwards. We had approximately $10.6 million of NOL carryforwards in Australia as of the same period.
Our ability to use our net operating loss (“NOL”) carryforwards and certain tax credit carryforwards may be subject to limitation. As of September 30, 2023, we had approximately $126.3 million of U.S. federal and $192.0 million of state and local NOL carryforwards. We had approximately $12.9 million of NOL carryforwards in Australia as of the same period.
Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected. 45 Risks Related to our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize our product candidates that we may pursue may be impaired.
Risks Related to our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize our product candidates that we may pursue may be impaired.
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction. 33 We have received Fast Track designation for one of our compounds and may seek such designation or breakthrough therapy and priority review for other compounds in the future.
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
Competitors may also claim that we are infringing their patents and restrict our freedom to operate. If a court or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all of our patent protection. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications. 2.
If a court or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all of our patent protection. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications. 2.
We may not be able to enter into arrangements with another diagnostic company to develop and obtain regulatory approval for of an alternative diagnostic test for use in connection with the development and commercialization of our drug candidates or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of our therapeutic candidates or therapeutics.
We may not be able to enter into arrangements with another diagnostic company to develop and obtain regulatory approval for of an alternative diagnostic test for use in connection with the development and commercialization of our drug candidates or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of our therapeutic candidates or therapeutics. 37 Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory approval prior to commercialization.
There can be no assurance that we will not, in the future be, a target of a short squeeze, and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is significantly disconnected from our underlying value.
There can be no assurance that we will not, in the future be, a target of a short squeeze, and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is significantly disconnected from our underlying value. 52 If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
The insurance costs along with the defense or payment of liabilities above the amount of coverage could cost us significant amounts of money and management distraction from other elements of the business, causing our business to suffer. If we are unable to safeguard against security breaches with respect to our information systems, our business may be adversely affected.
The insurance costs along with the defense or payment of liabilities above the amount of coverage could cost us significant amounts of money and management distraction from other elements of the business, causing our business to suffer.
Any misappropriation, loss or other unauthorized disclosure of confidential information gathered, stored or used by us could have a material impact on the operation of our business, including damaging our reputation with our employees, third parties and investors. We could also incur significant costs implementing additional security measures and organizational changes, implementing additional protection technologies, training employees or engaging consultants.
Any misappropriation, loss or other unauthorized disclosure of confidential information gathered, stored or used by us or by third parties on our behalf, could have a material impact on the operation of our business, including damaging our reputation with our employees, third parties and investors.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects. 57 If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.
We will need to raise additional funding and the current economic conditions may have a negative impact on our ability to raise additional needed capital on terms that are favorable to our Company or at all. We may not be able to generate significant revenues for several years, if at all.
The Company currently does not have access to sell shares under the Sales Agreement. We will need to raise additional funding and the current economic conditions may have a negative impact on our ability to raise additional needed capital on terms that are favorable to our Company or at all.
In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. 41 We conducted a Section 382 study during the year ended September 30, 2021 and determined that, during the year ended September 30, 2015, there was a change in ownership which resulted in $25.8 million of federal NOLs being subject to an annual limitation.
We conducted a Section 382 study during the year ended September 30, 2021 and determined that, during the year ended September 30, 2015, there was a change in ownership which resulted in $25.8 million of federal NOLs being subject to an annual limitation.
Additional funds may be required to support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further research and development programs of our drug product platform, sell some or all our intellectual property, merge with another entity or scale back operations. 32 If we or any companion diagnostic collaborator of ours are unable to successfully develop and obtain regulatory approval for companion diagnostic tests for our drug candidates, or experience significant delays in doing so, we may not realize the commercial potential of our drug candidates.
Additional funds may be required to support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further research and development programs of our drug product platform, sell some or all our intellectual property, merge with another entity or scale back operations.
If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business. 47 We are party to an exclusive license agreement with Life Science Research Israel Ltd., with respect to certain in-licensed intellectual property related to our ANAVEX ® 3-71 product candidate, and we may need to obtain additional licenses from others in the future.
We are party to an exclusive license agreement with Life Science Research Israel Ltd., with respect to certain in-licensed intellectual property related to our ANAVEX ® 3-71 product candidate, and we may need to obtain additional licenses from others in the future.
In the course of our business, we gather, transmit and retain confidential information through our information systems. Although we endeavor to protect confidential information through the implementation of security technologies, processes and procedures, it is possible that an individual or group could defeat security measures and access sensitive information about our business and employees.
We, and the third parties upon which we may rely, may be subject to a variety of these evolving threats. 43 Although we endeavor to protect confidential information through the implementation of security technologies, processes and procedures, it is possible that an individual or group could defeat security measures and access sensitive information about our business and employees.
Additionally, our compounds, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties, if we fail to comply with regulatory requirements or if we experience unanticipated problems with our compounds, when and if any of them are approved. 38 Following potential approval of any our compounds, the FDA may impose significant restrictions on a drug’s indicated uses or marketing or require potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy of the drug.
Following potential approval of any our compounds, the FDA may impose significant restrictions on a drug’s indicated uses or marketing or require potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy of the drug.
Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
We seek to protect our confidential proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators. These agreements are designed to protect our proprietary information.
In addition, courts outside the United States are sometimes less willing to protect trade secrets. Our competitors may independently develop equivalent knowledge, methods and know-how. We seek to protect our confidential proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators. These agreements are designed to protect our proprietary information.
Although we are not currently involved in any litigation, we may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and could harm our business. 49 Competitors may infringe our patents or other intellectual property.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and could harm our business.
Neither patents nor patent applications ensure the protection of our intellectual property for a number of reasons, including the following: 1. Competitors may interfere with our patenting process in a variety of ways. Competitors may claim that Anavex is not entitled to an issued patent for a variety of legal reasons.
Competitors may interfere with our patenting process in a variety of ways. Competitors may claim that Anavex is not entitled to an issued patent for a variety of legal reasons. Competitors may also claim that we are infringing their patents and restrict our freedom to operate.
If these legislative or executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted. 39 The COVID-19 coronavirus could adversely impact our business, including our clinical trials, and financial condition.
If these legislative or executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted. We receive Australian government research and development income tax incentive refunds.
We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates or by in-licensing intellectual property. U.S. patents related to ANAVEX ® 2-73 are directed to a dosage form comprising certain doses of ANAVEX ® 2-73 and donepezil, and the coverage is limited to the United States only.
We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates or by in-licensing intellectual property.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.
Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.
The outcome following legal assertions of invalidity and unenforceability is unpredictable. 58 Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications.
Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects. There can be no guarantee that our stock price will remain at current prices.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.
However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.
Enforcing a claim that someone illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Our competitors may independently develop equivalent knowledge, methods and know-how.
While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our information to competitors. Enforcing a claim that someone illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.
These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies.
In addition, companies trading in the stock market in general, and The Nasdaq Capital Market in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
In addition, we could incur increased litigation as a result of any potential cyber-security breach.
In addition, we could incur increased litigation as a result of any potential cyber-security breach and our insurance coverage may not be adequate or sufficient in type or amount to protect us from or to mitigate liabilities arising out of our privacy and security practices.
As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours. 46 We hold ownership or exclusive rights to seventeen U.S. patents, nineteen U.S. patent applications, and various PCT or ex-U.S. patent applications relating to our drug candidates, methods associated therewith, and to our research programs.
We hold ownership or exclusive rights to twenty-two U.S. patents, twenty-three U.S. patent applications, and various PCT or ex-U.S. patent applications relating to our drug candidates, methods associated therewith, and to our research programs. Neither patents nor patent applications ensure the protection of our intellectual property for a number of reasons, including the following: 1.
Pursuant to Section 404 of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock. Pursuant to Section 404 of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting.
Removed
Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory approval prior to commercialization.
Added
ITEM 1A. RISK FACTORS Risk Factor Summary The following is a summary of the risks and uncertainties that could cause our business, financial condition or operating results to be harmed.
Removed
In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China. Since then, the COVID-19 coronavirus has spread to multiple countries, including the United States, Australia and European and Asia-Pacific countries, including countries in which we have planned or active clinical trial sites.
Added
We encourage you to carefully review the full risk factors contained in this report in their entirety for additional information regarding these risks and uncertainties. ● Our history of losses and no revenue raises a risk regarding our ability to continue as a going concern in the future; ● We have a very limited relevant operating history upon which an evaluation of our performance and prospects can be made.
Removed
As the COVID-19 coronavirus continues to spread around the globe, we may experience disruptions that could potentially impact our business and clinical trials.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We do not own any real property. We maintain a corporate head office at 630 5th Avenue, 20th Floor, New York, NY, USA. Our lease costs for this office are approximately $9,500 per month.
Biggest changeITEM 2. PROPERTIES We do not own any real property. We maintain a corporate head office at 630 5th Avenue, 20th Floor, New York, NY, USA. Our lease costs for this office are approximately $10,000 per month.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, is an adverse party or has a material interest adverse to our or our subsidiary’s interest. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeThere are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, is an adverse party or has a material interest adverse to our or our subsidiary’s interest. 60 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 51 PART II 51 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 51 ITEM 6 [Reserved] 52 ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 52 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 57 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 61 PART II 61 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 61 ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 61 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 67 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA F-1

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table summarizes our research and development expenses for the years ended September 30, 2022, and 2021 (in thousands): 2022 2021 Costs of external service providers $ 18,102 $ 21,243 Personnel costs 8,012 6,987 Stock-based compensation 11,250 4,660 License fees 500 — Other common costs 52 94 Total research and development costs $ 37,916 $ 32,984 During fiscal 2022, external service providers costs by product candidate were as follows (in thousands): ANAVEX ® 2-73 $ 15,510 ANAVEX ® 3-71 2,251 All other product candidates 298 Other external service provider costs 43 Total external service provider costs $ 18,102 The decrease in external service provider costs from fiscal 2021 to fiscal 2022 is related to a decrease in clinical trial expenditures over the comparable period, associated with the completion of the enrollment and recruitment activities for our Phase 2b/3 trial in Alzheimer ’ s disease, and manufacturing activities in the comparable period associated with the Rett syndrome program.
Biggest changeThe following table summarizes our research and development expenses for the years ended September 30, 2023, and 2022 (in thousands): 2023 2022 Costs of external service providers $ 22,542 $ 18,102 Personnel costs 10,264 8,012 Stock-based compensation 10,812 11,250 License fees — 500 Other common costs 99 52 Total research and development costs $ 43,717 $ 37,91 6 External service providers cost by product candidate was as follows (in thousands): 2023 2022 ANAVEX ® 2-73 $ 19,540 $ 15,510 ANAVEX ® 3-71 2,624 2,251 All other product candidates 6 298 Other external service provider costs 372 43 Total external service provider costs $ 22,542 $ 18,10 2 The increase in external service provider costs from fiscal 2022 to fiscal 2023 is primarily due to (1) an increase in manufacturing costs for both ANAVEX ® 2-73 and ANAVEX ® 3-71, in preparation for planned clinical trials or studies and (2) an increase in clinical trial expenditures related to our Rett program in connection with the completed enrollment and dosing of our Phase 2/3 Excellence pediatric clinical trial.
The primary objective of our investment policy is to preserve principal and liquidity. To achieve this objective, our investment policy allows for investments in domestic money market certificates, certificates of deposit, money market funds, commercial papers, bonds or commercial papers, and establishes diversification and credit quality requirements and limits investments by maturity and issuer.
The primary objective of our investment policy is to preserve principal and liquidity. To achieve this objective, our investment policy allows for investments in domestic money market certificates, certificates of deposit, money market funds, bonds or commercial papers, and establishes diversification and credit quality requirements and limits investments by maturity and issuer.
As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical trial contract. 56 In addition, we incur expenses in respect of the acquisition of intellectual property relating to patents and trademarks.
As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical trial contract. In addition, we incur expenses in respect of the acquisition of intellectual property relating to patents and trademarks.
Due to these risks and uncertainties, we expense the acquisition of patents and trademarks. Stock-based Compensation We account for all stock-based payments and awards under the fair value-based method.
Due to these risks and uncertainties, we expense the acquisition of patents and trademarks 66 Stock-based Compensation We account for all stock-based payments and awards under the fair value-based method.
Recent Sales of Unregistered Securities Since the beginning of our fiscal year ended September 30, 2022, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.
Recent Sales of Unregistered Securities Since the beginning of our fiscal year ended September 30, 2023, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.
We do not believe that inflation has had a material impact on our results of operations during the periods presented.
We do not believe that inflation has had a material impact on our results of operations during the periods presented. 68
For the year ended September 30, 2022, a majority of our expenses were denominated in U.S. dollars. A hypothetical 10% change in foreign exchange rates applied to foreign currency transactions for the year ended September 30, 2022 would not have had a material impact on our consolidated financial statements.
For the year ended September 30, 2023, a majority of our expenses were denominated in U.S. dollars. A hypothetical 10% change in foreign exchange rates applied to foreign currency transactions for the year ended September 30, 2023 would not have had a material impact on our consolidated financial statements.
Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved. Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification (“ASC”) 730, Research and Development, as these materials have no alternative future use outside of their intended use.
Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved. Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification ( “ ASC ” ) 730, Research and Development, as these materials have no alternative future use outside of their intended use.
To date, we have not experienced a loss of principal on any of our investments and as of September 30, 2022 we did not have any allowance for credit losses from our cash and cash equivalents. 57 Foreign Exchange Risk We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars and as a result of the existence of sales and tax incentive receivables denominated in other than U.S. dollars.
To date, we have not experienced a loss of principal on any of our investments and as of September 30, 2023 we did not have any allowance for credit losses from our cash and cash equivalents. 67 Foreign Exchange Risk We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars and as a result of the existence of sales and tax incentive receivables denominated in other than U.S. dollars.
These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and stock based compensation expense, contract services including external research and development expenses incurred under arrangements with third parties such as contract research organizations (“CROs”), facilities costs, overhead costs and other related expenses.
These expenses are comprised of the costs of the Company ’ s proprietary research and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and stock-based compensation expense, contract services including external research and development expenses incurred under arrangements with third parties such as contract research organizations ( “ CROs ” ), facilities costs, overhead costs and other related expenses.
These assumptions consist of estimates of future market conditions, which are inherently uncertain, and therefore, are subject to management’s judgment. Changes in these assumptions can materially affect the fair value estimates.
These assumptions consist of estimates of future market conditions, which are inherently uncertain, and therefore, are subject to management ’ s judgment. Changes in these assumptions can materially affect the fair value estimates.
At September 30, 2022, we held net assets of $6.4 million (AUD $9.9 million) denominated in Australian dollars. A hypothetical 10% change in foreign exchange rates at September 30, 2022 would result in a change in reported net assets of +/- $0.6 million. Inflation Risk Inflation generally may affect us by increasing our cost of labor and clinical trial costs.
At September 30, 2023, we held net assets of $5.0 million (AUD $7.8 million) denominated in Australian dollars. A hypothetical 10% change in foreign exchange rates at September 30, 2023 would result in a change in reported net assets of +/- $0.5 million. Inflation Risk Inflation generally may affect us by increasing our cost of labor and clinical trial costs.
A hypothetical 100 basis point change in interest rates during any of the periods presented would not have a material impact on the fair market value of our cash and cash equivalents as of September 30, 2022 and 2021.
A hypothetical 100 basis point change in interest rates during any of the periods presented would not have a material impact on the fair market value of our cash and cash equivalents as of September 30, 2023 and 2022 and would impact our net loss by approximately $1.4 million.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is quoted on the Nasdaq Global Select Stock Market (“Nasdaq”) under the symbol “AVXL.” 51 Holders of Common Stock As of November 28, 2022 , there were approximately 49 stockholders of record, and 77,961,815 shares of our common stock were issued and outstanding.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is quoted on the Nasdaq Global Select Stock Market (“Nasdaq”) under the symbol “AVXL.” Holders of Common Stock As of November 24, 2023 , there were approximately 48 stockholders of record, and 82,086,511 shares of our common stock were issued and outstanding.
At September 30, 2022 and 2021, the majority of our excess cash was held in a JP Morgan Chase Prime Money Market Fund. The average amount invested at any given time throughout the year ended September 30, 2022 was $132.7 million (high: $133.2 million; low: $132.2 million) and the average rate of return was 0.74%.
At September 30, 2023 and 2022, the majority of our excess cash was held in a JP Morgan Chase Prime Money Market Fund. The average amount invested at any given time throughout the year ended September 30, 2023 was $138.4 million (high: $145.4 million; low: $129.5 million) and the average rate of return was 4.69%.
The decrease was offset by an increase in interest income. During fiscal 2022, we recorded $3.3 million in research and development incentive income, consisting of the Australian research and development incentive credit administered through the Australian Tax Office, in connection with fiscal 2022 eligible expenditures.
During fiscal 2023, we recorded $2.7 million in research and development incentive income, consisting of the Australian research and development incentive credit administered through the Australian Tax Office, in connection with fiscal 2023 eligible expenditures. In comparison, research and development incentive income for fiscal 2022 was $3.3 million in connection with fiscal 2022 eligible expenditures.
Cash provided by financing activities in fiscal 2021 was $153.2 million, net of financing costs, primarily attributable to cash received from the issuance of common shares at various market prices under the 2019 Purchase Agreement, the Sales Agreement and a direct registered offering.
Cash provided by financing activities in fiscal 2022 was $21.3 million, net of financing costs, primarily attributable to cash received from the issuance of common shares at various market prices under the Sales Agreement.
Cash for operations was generated through the issuance of shares of common stock under the financing arrangements described below. 53 We will continue to see an increase in our research and development expenditures as we advance our ANAVEX ® 2-73 clinical trials, including planned advancement of ANAVEX ® 2-73 for Parkinson’s disease program, planned initiation of a Fragile X clinical program, ongoing extension studies of our current clinical programs, continued advancement of our other pipeline compounds such as ANAVEX ® 3-71, and as we continue to add additional staffing to manage and support these clinical initiatives.
We expect to continue to see an increase in our research and development expenditures as we advance our ANAVEX ® 2-73 clinical studies, including planned advancement of ANAVEX ® 2-73 for Parkinson ’ s disease program, ongoing extension studies of our current clinical programs, continued advancement of our other pipeline compounds such as ANAVEX ® 3-71, and as we continue to add additional staffing to manage and support these clinical initiatives.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
As of September 30, 2023 and 2022, no shares of our common stock remained available for purchase by Lincoln Park under the 2019 Purchase Agreement. 65 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Our operating costs consist primarily of research and development activities including the cost of clinical trials and clinical supplies as well as clinical drug manufacturing and formulation. Research and development expenses also include personnel related costs such as salaries and wages, and third-party contract research organization (CRO) expenses in support of these clinical trials.
Research and development expenses also include personnel related costs such as salaries and wages, and third-party contract research organization (CRO) expenses in support of these clinical studies.
As of September 30, 2022 and 2021, no shares of our common stock remain available for purchase by Lincoln Park under the 2019 Purchase Agreement.
As of September 30, 2023, an amount of $122.1 million in shares of our common stock remain available for purchase by Lincoln Park under the 2023 Purchase Agreement.
Operating Expenses Our operating expenses for fiscal 2022 increased to $51.0 million, from $42.0 million in fiscal 2021. The increase is attributable to an increase in research and development expenses of $4.9 million in 2022 to $37.9 million, as described below.
Comparison of year ended September 30, 2023 to year ended September 30, 2022 Operating Expenses Our operating expenses for fiscal 2023 increased to $55.8 million, from $51.0 million in fiscal 2022. The increase is attributable to an increase in research and development expenses of $5.7 million in 2023 to $43.7 million.
Past operating results are not necessarily indicative of results that may occur in future periods. This discussion contains forward-looking statements, which involve a number of risks and uncertainties. See Forward Looking Statements included elsewhere in this report. This section discusses year over year comparisons for the fiscal years ended September 30, 2022 and 2021.
Past operating results are not necessarily indicative of results that may occur in future periods. This discussion contains forward-looking statements, which involve a number of risks and uncertainties. See Forward Looking Statements included elsewhere in this report. 61 Financial Operations Overview We are in the development stage and have not earned any revenues since our inception in 2004.
Overview We are in the development stage and have not earned any revenues since our inception in 2004. We do not anticipate earning any revenues until we can establish an alliance with other companies to develop, co-develop, license, acquire or market our products.
We do not anticipate earning any revenues until we can establish an alliance with other companies to develop, co-develop, license, acquire or market our products. Our operating costs consist primarily of research and development activities including the cost of clinical studies and clinical supplies as well as clinical drug manufacturing and formulation.
Other Financings Purchase Agreement On June 7, 2019, we entered into a Purchase Agreement (the “2019 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), as amended on July 1, 2020, pursuant to which Lincoln Park committed to purchase up to $50.0 million of our common stock.
During the year ended September 30, 2022, 1,623,813 shares were sold under the Sales Agreement for gross proceeds of $21.0 million (net proceeds of $20.3 million after deducting commissions and offering expenses). 2019 Purchase Agreement On June 7, 2019, we entered into a Purchase Agreement (the “2019 Purchase Agreement”) with Lincoln Park, as amended on July 1, 2020, pursuant to which Lincoln Park committed to purchase up to $50.0 million of our common stock.
Other income Net other income for the year ended September 30, 2022 was $3.4 million as compared to $4.4 million for fiscal 2021.
Other income (net) Net other income for the year ended September 30, 2023 was $8.3 million as compared to $3.4 million for fiscal 2022. The primary reason for the increase in other income was due to an increase in interest income earned on cash and cash equivalents, due to an increase in market wide interest rates year over year.
Liquidity and Capital Resources Working Capital 2022 2021 Current Assets $ 152,704,603 $ 161,616,490 Current Liabilities 10,213,561 10,798,386 Working Capital $ 142,491,042 $ 150,818,104 At September 30, 2022, we had $149.2 million in cash and cash equivalents, a decrease of $2.9 million, from $152.1 million at September 30, 2021.
Liquidity and Capital Resources Working Capital (in thousands) 2023 2022 Current Assets $ 154,386 $ 152,705 Current Liabilities 12,534 10,214 Working Capital $ 141,852 $ 142,491 At September 30, 2023, we had $151.0 million in cash and cash equivalents, an increase from $149.2 million at September 30, 2022.
General and administrative expenses for fiscal 2022 increased to $13.1 million, from $9.0 million in fiscal 2021, most significantly related to an increase in personnel and an increase in associated non-cash stock option compensation charges. During fiscal 2022, we utilized cash and cash equivalents of $24.2 million to fund our operations, compared to $30.4 million during fiscal 2021.
During fiscal 2023, we utilized cash and cash equivalents of $27.8 million to fund our operations, compared to $24.2 million during fiscal 2022. Our cash position increased slightly to $151.0 million at September 30, 2023, an increase of $1.9 million over the prior year.
Net loss Net loss for fiscal 2022 was $48.0 million, or $0.62 per share, compared to a net loss of approximately $37.9 million, or $0.54 per share for fiscal 2021.
We expect to continue to receive support from the Australian government for various clinical trials being conducted within Australia. Net loss Net loss for fiscal 2023 was $47.5 million, or $0.60 per share, compared to a net loss of approximately $48.0 million, or $0.62 per share for fiscal 2022.
Cash Flows 2022 2021 Cash flows used in operating activities $ (24,237,864 ) $ (30,383,674 ) Cash flows provided by financing activities 21,287,980 153,242,401 Increase (decrease) in cash $ (2,949,884 ) $ 122,858,727 Cash flow used in operating activities There was a decrease in cash used in operating activities of $6.1 million during fiscal 2022 primarily due to the collection of incentive and tax receivables. 54 Cash flow provided by financing activities Cash provided by financing activities in fiscal 2022 was $21.3 million, net of financing costs, primarily attributable to cash received from the issuance of common shares at various market prices under the Sales Agreement.
Cash Flows Following is a summary of sources of cash flows for the years ended September 30, 2023 and 2022 (in thousands) 2023 2022 Cash flows used in operating activities $ (27,785 ) $ (24,238 ) Cash flows provided by financing activities 29,651 21,288 Increase (decrease) in cash $ 1,866 $ (2,950 ) 63 Cash flow used in operating activities There was an increase in cash used in operating activities of $1.9 million during fiscal 2023 primarily due to the collection of incentive and tax receivables in the comparable period.
Personnel costs consist of salaries and wages, benefits and stock-based compensation for general and administrative personnel.
Personnel costs consist of salaries and wages, benefits and stock-based compensation for general and administrative personnel. Outside professional services and public company expenses, include expenses related to compliance and reporting, additional insurance expenses, audit and SOX compliance, expenses associated with patent research, applications and filings, investor and stockholder relations activities and other administrative expenses and professional services.
Removed
Discussion of year over year comparisons between the fiscal years ended September 30, 2021 and 2020 have been excluded from this Form 10-K and can be found in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
Added
During fiscal 2023, our personnel costs increased to $10.3 million from $8.0 million as a result of our expanded team.
Removed
Outside professional services and public company expenses, include expenses related to compliance and reporting, additional insurance expenses, audit and SOX compliance, expenses associated with patent research, applications and filings, investor and stockholder relations activities and other administrative expenses and professional services. 52 Year ended September 30, 2022 During fiscal 2022, we advanced our business and clinical trials through the following events: ● In January 2022, we reported positive top-line results from the placebo-controlled Phase 1 clinical trial (ANAVEX®3-71-001) in development for the treatment of neurodegenerative diseases including Frontotemporal Dementia (FTD), for which ANAVEX®3-71 has been granted Orphan Drug Designation by the FDA.
Added
However, this was offset by a decrease in stock-based compensation expense as a result of the vesting of previously awarded milestone-based option awards. 62 General and administrative expenses for fiscal 2023 decreased to $12.0 million, from $13.1 million in fiscal 2022, most significantly related to a decrease in non-cash stock option compensation charges as a result of the vesting of previously awarded milestone-based option awards.
Removed
The trial achieved primary and secondary safety endpoints. ● In February 2022, we reported positive top-line results from the second randomized, placebo-controlled AVATAR Phase 3 clinical trial (ANAVEX®2-73-RS-002) for the treatment of adult patients with Rett syndrome.
Added
Cash for operations was generated through the issuance of shares of common stock under the financing arrangements described below.
Removed
The trial met its primary and secondary efficacy and safety endpoints, with consistent and clinically meaningful improvements in all efficacy measures. ● In April 2022, we completed the last patient visit in the 48-week open label extension of the Parkinson’s Disease Dementia Phase 2 clinical trial. ● In June 2022, the last patient last visit in the randomized, placebo-controlled Phase 2b/3 clinical trial ANAVEX®2-73-AD-004 for the treatment of early Alzheimer’s disease occurred.
Added
Cash flow provided by financing activities Cash provided by financing activities in fiscal 2023 was $29.7 million, primarily attributable to cash received from the issuance of common shares at various market prices under the 2023 Purchase Agreement (as defined below).
Removed
We expect to present top line data at the upcoming Clinical Trial on Alzheimer’s Disease (CTAD) Congress 2022 in San Francisco, CA. ● Throughout fiscal 2022, we made significant progress in the randomized, placebo-controlled EXCELLENCE Phase 2/3 clinical trial ANAVEX®2-73-RS-003 for the treatment of pediatric patients with Rett syndrome with expansion of enrollment into clinical sites across Canada and the United Kingdom.
Added
Other Financings 2023 Purchase Agreement On February 3, 2023, the Company entered into a $150,000,000 purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $150.0 million in value of its shares of Common Stock from time to time over a three-year period until February 3, 2026.
Removed
This decrease was offset by an increase in personnel costs and non-cash stock-based compensation associated with an expanding team directly engaged in support of ongoing research and development activities.
Added
On any business day and subject to certain customary conditions, the Company may direct Lincoln Park to purchase up to 200,000 shares of Common Stock (such purchases, “ Regular Purchases ”).
Removed
Our cash position decreased to $149.2 million at September 30, 2022, a decrease of $2.9 million over the prior year.
Added
The amount of a Regular Purchase may increase under certain circumstances based on the market price of the Common Stock; provided, however, that Lincoln Park’s committed obligation under any Regular Purchase shall not exceed $4.0 million.
Removed
The primary reason for the decrease in other income was due to a decrease in research and development incentive income and an increased foreign exchange loss associated with incentive and other receivables denominated in Australian dollars, and related impact from the fluctuation of the Australian dollar against the US dollar during the year.
Added
The purchase price of shares of Common Stock will be based on the then prevailing market prices of such shares at the time of sales as described in the Purchase Agreement. There are no limits on the price per share that Lincoln Park may pay to purchase Common Stock under the Purchase Agreement.
Removed
In comparison, research and development incentive income for fiscal 2021 was $4.5 million in connection with fiscal 2021 eligible expenditures and fiscal 2020 expenditures for which an overseas finding ruling was obtained during fiscal 2021. We expect to continue to receive support from the Australian government for various clinical trials being conducted within Australia.
Added
In addition, if the Company has directed Lincoln Park to purchase the full amount of Common Stock available as a Regular Purchase on a given day, it may direct Lincoln Park to purchase additional amounts as “accelerated purchases” and “additional accelerated purchases,” each as set forth in the Purchase Agreement.
Removed
The decrease in cash and cash equivalents during the year is a result of cash utilized in operations, partially offset by cash provided by financing activities, as described below.
Added
The Purchase Agreement limits the Company’s sale of shares of Common Stock to Lincoln Park to 15,606,426 shares of Common Stock, representing 19.99% of the shares of the Common Stock outstanding on the date of the Purchase Agreement unless (i) stockholder approval is obtained to issue more than such amount or (ii) the average price of all applicable sales of Common Stock to Lincoln Park under the Purchase Agreement equals or exceeds the lower of (A) the closing price of the Common Stock on the Nasdaq Capital Market immediately preceding the Execution Date or (B) the average of the closing price of the Common Stock on the Nasdaq Capital Market for the five Business Days immediately preceding the Execution Date.
Removed
During fiscal 2022, 1,623,813 shares were sold pursuant to the At-the-Market Offering for gross proceeds of $21.0 million (net proceeds of $20.3 million after deducting offering expenses).
Added
The Purchase Agreement also prohibits the Company from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated with all other shares of Common Stock then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of Common Stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder.
Removed
During fiscal 2021, 5,634,576 shares were sold pursuant to the At-the-Market Offering for gross proceeds of $79.1 million (net proceeds of $76.7 million after deducting commissions and offering expenses). 55 Registered Direct Offering On June 24, 2021, the Company completed a registered direct offering off of the Company’s shelf registration statement on Form S-3 filed with the SEC on July 3, 2019.
Added
In consideration for entering into the 2023 Purchase Agreement, the Company issued to Lincoln Park 75,000 shares of Common Stock as a commitment fee (the “initial commitment shares”) during the year ended September 30, 2023 and agreed to issue up to 75,000 shares pro rata (collectively with the initial commitment shares, the “commitment shares”), when and if, Lincoln Park purchased, at the Company’s discretion, the $150.0 million aggregate commitment. 64 During the year ended September 30, 2023, the Company issued to Lincoln Park an aggregate of 3,288,943 (2022: 0) shares of Common Stock under the 2023 Purchase Agreement, including 3,275,000 (2022: 0) shares of Common Stock for aggregate proceeds of $27.9 million (2022: $0) and 88,943 (2022: 0) commitment shares (inclusive of the 75,000 initial commitment shares).
Removed
The Company issued 2,380,953 common shares at $21.00 per share for gross proceeds of $50.0 million (net proceeds of $46.9 million after deducting offering fees and expenses).
Added
No shares were sold during the year ended September 30, 2023 under the Sales Agreement. The Company currently does not have access to sell shares of common stock with the Sales Agents.

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