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What changed in ANAVEX LIFE SCIENCES CORP.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ANAVEX LIFE SCIENCES CORP.'s 2023 and 2024 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 2024 report.

+355 added−310 removedSource: 10-K (2024-12-23) vs 10-K (2023-11-27)

Top changes in ANAVEX LIFE SCIENCES CORP.'s 2024 10-K

355 paragraphs added · 310 removed · 255 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

128 edited+41 added−22 removed220 unchanged
Biggest changeIn 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.
Biggest changeWhile 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. 22 There are also requirements governing the submission of certain clinical trials and completed trial results to public registries.
In pediatric diseases, such as Rett syndrome or infantile spasms, the chronic cellular stress is possibly caused by the presence of a constant genetic mutation. In neurodegenerative diseases, such as Alzheimer’s and Parkinson’s diseases, chronic cellular stress is possibly caused by age-correlated buildup of cellular insult and hence chronic cellular stress.
In pediatric diseases, such as Rett syndrome or infantile spasms, chronic cellular stress is possibly caused by the presence of a constant genetic mutation. In neurodegenerative diseases, such as Alzheimer’s and Parkinson’s diseases, chronic cellular stress is possibly caused by age-correlated buildup of cellular insult and hence chronic cellular stress.
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 data demonstrated dose related 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”).
If the ANDA or 505(b)(2) applicant has made a Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent holders once the ANDA or 505(b)(2) application has been accepted for filing by FDA.
If the ANDA or 505(b)(2) applicant has made a Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent holders once the ANDA or 505(b)(2) application has been accepted for filing by the FDA.
The filing of a patent infringement lawsuit within 45 days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.
The filing of a patent infringement lawsuit within 45 days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.
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.
A person or entity need not have actual knowledge of this law or specific intent to commit a violation of this law. 18 U.S.C. § 1518 establishes criminal liability for whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, obstruct, mislead, or delay the communication of information or records relating to a violation of a Federal health care offense to a criminal investigator.
A person or entity need not have actual knowledge of this law or specific intent to commit a violation of this law. 29 18 U.S.C. § 1518 establishes criminal liability for whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, obstruct, mislead, or delay the communication of information or records relating to a violation of a Federal health care offense to a criminal investigator.
In August 2020, patients completing these Phase 2a trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the Australian Government Department of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme. A larger Phase 2b/3 double-blind, placebo-controlled trial of ANAVEX ® 2-73 in Alzheimer’s disease commenced in August 2018.
In August 2020, patients completing these Phase 2a trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the Australian Government Department of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme. A larger Phase 2b/3 double-blind, placebo-controlled trial of ANAVEX ® 2-73 in early Alzheimer’s disease commenced in August 2018.
A determination of liability under such laws could result in fines, penalties, and exclusion, as well as restrictions on the ability to operate in these jurisdictions. Corporate liability can be present as a result of the illegal activities of employees, representatives, contractors, collaborators, agents, subsidiaries, or affiliates, even if they were not explicitly authorized.
A determination of liability under such laws could result in fines, penalties, and exclusion, as well as restrictions on the ability to operate in these jurisdictions. 30 Corporate liability can be present as a result of the illegal activities of employees, representatives, contractors, collaborators, agents, subsidiaries, or affiliates, even if they were not explicitly authorized.
In addition, the Inflation Reduction Act (“IRA”) passed on August 16, 2022. The IRA, among other things, (1) directs HHS to negotiate the price of certain highly-utilized single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
In addition, 31 the Inflation Reduction Act (“IRA”) passed on August 16, 2022. The IRA, among other things, (1) directs HHS to negotiate the price of certain highly-utilized single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation. If a drug receives FDA approval, the approval may be limited to specific diseases and dosages, which could restrict the commercial value of the product.
The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation. 23 If a drug receives FDA approval, the approval may be limited to specific diseases and dosages, which could restrict the commercial value of the product.
As discussed below, the ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the reference-listed drug has expired. Market exclusivity provisions under the FDCA can delay the submission or approval of certain marketing applications.
As discussed below, the ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the reference-listed drug has expired. 26 Market exclusivity provisions under the FDCA can delay the submission or approval of certain marketing applications.
The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug.
The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, as, for example, new indications, dosages or strengths of an existing drug.
The two endpoints, MDS-UPDRS Part II + III and CGI-I measured in this study are the planned primary and key secondary endpoints in our forthcoming pivotal 6-month Parkinson’s disease study. In January 2021, we were awarded a research grant of $1.0 million from The Michael J.
The two endpoints, MDS-UPDRS Part II + III and CGI-I measured in this study are the planned primary and key secondary endpoints in our forthcoming >6-month Parkinson’s disease study. In January 2021, we were awarded a research grant of $1.0 million from The Michael J.
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.
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.
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.
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.
This patent is expected to expire in September 2038, absent any patent term extension for regulatory delays. Further, we own one issued U.S. Patent with claims directed to a method of treating systolic hypertension using ANAVEX ® 2-73. This patent is expected to expire in July 2039, absent any patent term extension for regulatory delays.
This patent is expected to expire in July 2038, absent any patent term extension for regulatory delays. Further, we own one issued U.S. patent with claims directed to a method of treating systolic hypertension using ANAVEX ® 2-73. This patent is expected to expire in July 2039, absent any patent term extension for regulatory delays.
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.
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.
There are specific FDA regulations that govern this process. U.S. coverage and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any compound for which we may seek regulatory approval.
There are specific FDA regulations that govern this process. 27 U.S. coverage and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any compound for which we may seek regulatory approval.
It is associated with degeneration of the basal ganglia of the brain and a deficiency of the neurotransmitter dopamine. Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.
It is associated with degeneration of the basal ganglia of the brain and deficiency of the neurotransmitter dopamine. Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.
The Phase 2b/3 trial enrolled 509 patients, which were treated with a convenient once-daily oral formulation of ANAVEX ® 2-73 for 48 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses or placebo. The trial took place at 52 sites across North America, Europe and Australia.
The Phase 2b/3 trial enrolled 508 patients, which were treated with a convenient once-daily oral formulation of ANAVEX ® 2-73 for 48 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses or placebo. The trial took place at 52 sites across North America, Europe and Australia.
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.
While no agreement offers absolute protection, such agreements provide some form of recourse in the event of disclosure, or anticipated disclosure. 20 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.
We also own an issued U.S. patent that claims crystalline forms of ANAVEX ® 19-144, dosage forms and compositions containing the crystalline forms of ANAVEX ® 19-144, and methods of treatment for Alzheimer’s disease. This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. Further, we own one issued U.S.
We also own an issued U.S. patent that claims crystalline forms of ANAVEX ® 19-144, dosage forms and compositions containing the crystalline forms of ANAVEX ® 19-144, and methods of treatment for Alzheimer’s disease. This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays.
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 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. This patent is expected to expire in June 2036, absent any patent term extension for regulatory delays.
The preclinical data demonstrated that treatment with ANAVEX ® 2-73 significantly increased survival and reduced seizures in those mice. ANAVEX ® 3-71 ANAVEX ® 3-71 is a clinical drug candidate with a novel mechanism of action via SIGMAR1 activation and M1 muscarinic allosteric modulation, which has been shown to enhance neuroprotection and cognition in Alzheimer’s disease models.
The preclinical data demonstrated that treatment with ANAVEX ® 2-73 significantly increased survival and reduced seizures in those mice. ANAVEX ® 3-71 ANAVEX ® 3-71 is an orally available clinical drug candidate with a novel mechanism of action via SIGMAR1 activation and M1 muscarinic allosteric modulation, which has been shown to enhance neuroprotection and cognition in Alzheimer’s disease models.
It is a low molecular weight, synthetic compound exhibiting high affinity for SIGMAR1 at nanomolar levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels. In advanced pre-clinical studies, this compound revealed antitumor potential.
It is a low molecular weight, synthetic compound exhibiting high affinity for sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels. In advanced pre-clinical studies, this compound revealed antitumor potential.
In March 2023, we reported the preliminary ANAVEX2-73-PDD-EP-001 OLE trial data, which demonstrated longitudinal beneficial effects of ANAVEX ® 2-73 on the prespecified primary and secondary objectives. Preliminary analysis reveals that ANAVEX ® 2-73 was found to be generally safe and well tolerated; and safety findings in this trial were consistent with the known safety profile of ANAVEX ® 2-73.
In March 2023, we reported the preliminary ANAVEX2-73-PDD-EP-001 OLE trial data, which demonstrated longitudinal beneficial effects of ANAVEX ® 2-73 on the pre-specified primary and secondary objectives. Preliminary analysis reveals that ANAVEX ® 2-73 was found to be generally safe and well tolerated, and safety findings in this trial were consistent with the known safety profile of ANAVEX ® 2-73.
The third of these three patents claims a dosage form for seizure reduction, comprising (i) ANAVEX19-144 ® , (ii) ANAVEX 2-73 ® , or (iii) a combination of ANAVEX19-144 ® and ANAVEX 2-73 ® ; and optionally further comprising a low-dose anti-epilepsy drug.
The third of these three patents claims a dosage form for seizure reduction, comprising (i) ANAVEX ® 19-144, (ii) ANAVEX ® 2-73, or (iii) a combination of ANAVEX ® 19-144 and ANAVEX ® 2-73; and optionally further comprising a low-dose anti-epilepsy drug.
All three patents are expected to expire in October 2035, absent any patent term extension for regulatory delays. We also own three issued U.S. patents with claims directed to treating neurodevelopmental disorders.
All three patents are expected to expire in October 2035, absent any patent term extension for regulatory delays. 19 We also own four issued U.S. patents with claims directed to treating neurodevelopmental disorders.
ANAVEX ® 3-71 is a CNS-penetrable potential disease-modifying treatment for cognitive impairments. We believe it is effective in very small doses against the major Alzheimer’s hallmarks in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, and also has beneficial effects on inflammation and mitochondrial dysfunctions.
ANAVEX ® 3-71 is a CNS-penetrable potential disease modifying treatment for cognitive impairments. We believe it is effective in against the major Alzheimer’s hallmarks in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, and also has beneficial effects on inflammation and mitochondrial dysfunctions.
Further, our data also demonstrates that ANAVEX ® 2-73 has the potential to provide protection for oligodendrocytes (“OL’s”) and oligodendrocyte precursor cells (“OPC’s”), as well as central nervous system neurons in addition to helping repair by increasing OPC proliferation and maturation in tissue culture.
Further, our data also demonstrates that ANAVEX ® 2-73 has the potential to provide protection for oligodendrocytes and oligodendrocyte precursor cells (“OPCs”), as well as central nervous system neurons in addition to helping repair by increasing OPC proliferation and maturation in tissue culture.
Additionally, we own one issued U.S. Patent with claims directed to pharmaceutical dosage forms of (-) enantiomer of ANAVEX ® 2-73. This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. We also own two issued U.S. patents related to ANAVEX ® 1066.
Additionally, we own one issued U.S. patent with claims directed to pharmaceutical dosage forms of (-) enantiomer of ANAVEX ® 2-73. This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. We also own three (3) issued U.S. patents related to ANAVEX ® 1066.
We also own other patent applications directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional protection for one or more of our product candidates. We regard patents and other intellectual property rights as corporate assets.
We also own other patent applications and certain granted foreign patents directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional protection for one or more of our product candidates. We regard patents and other intellectual property rights as corporate assets.
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 regulatory authorities to obtain regulatory guidance.
We own one issued U.S. patent entitled “A2-73 crystalline polymorph compositions of matter and methods of use thereof”. It claims crystals of A2-73 freebase or its fumarate salt, dosage forms and pharmaceutical formulations. This patent is expected to expire in July 2039, absent any patent term extension for regulatory delays.
This patent is expected to expire in June 2034, absent any patent term extension for regulatory delays. We own one issued U.S. patent entitled “A2-73 crystalline polymorph compositions of matter and methods of use thereof”. It claims crystals of A2-73 freebase or its fumarate salt, dosage forms and pharmaceutical formulations.
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.
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 CDR computerized assessment system analysis.
The trial met its primary and secondary endpoints of safety, respectively, with no serious adverse events (SAEs) or dose-limiting toxicities observed, as more fully described above under Clinical Trials Overview – Frontotemporal Dementia .
The trial met its primary and secondary endpoints of safety, respectively, with no serious adverse events (SAEs) or dose-limiting toxicities observed, as more fully described above under Clinical Trials Overview – Schizophrenia, Frontotemporal Dementia and Alzheimer’s disease .
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.
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-five (25) U.S. patents, twenty-five (25) 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.
The OLE trial assessed safety, tolerability and efficacy, measuring among others, MDS-Unified Parkinson’s Disease Rating Scale Parts I, II, III, REM Sleep Behavior Disorder Screening Questionnaire (RBDSQ), Clinical Global Impression – Improvement (CGI-I), as well as cognitive efficacy endpoint Montreal Cognitive Assessment (MoCA) over a 48-week period.
The OLE trial assessed safety, tolerability and efficacy, measuring among others, MDS-Unified Parkinson’s Disease Rating Scale Parts I, II, III, REM Sleep Behavior Disorder Screening Questionnaire (RBDSQ), CGI-I, as well as cognitive efficacy endpoint Montreal Cognitive Assessment (MoCA) over a 48-week period.
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.
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 either confirm the mechanism of action of ANAVEX ® 2-73 (blarcamesine) or target patients who are most likely to respond to ANAVEX ® 2-73 (blarcamesine) treatment.
We may in the future utilize such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia or Rett syndrome in which ANAVEX ® 2-73 (blarcamesine) is currently being studied.
We may in the future utilize such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia in which ANAVEX ® 2-73 (blarcamesine) is currently being studied.
In addition, the trial confirmed the precision medicine approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ® 2-73 may result in improved clinical outcomes. A 48-week Open Label Extension (“OLE”) ANAVEX2-73-PDD-EP-001 Phase 2 trial was offered to participants after completion of the double-blind placebo-controlled ANAVEX2-73-PDD-001 Phase 2 trial discussed above.
In addition, the trial confirmed the precision medicine approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ® 2-73 may result in improved clinical outcomes. A 48-week OLE ANAVEX2-73-PDD-EP-001 Phase 2 trial was offered to participants after completion of the double-blind placebo-controlled ANAVEX2-73-PDD-001 Phase 2 trial discussed above.
In October 2023 a peer-reviewed publication in the journal Neurobiology of Aging, titled “Early treatment with an M1 and sigma-1 receptor agonist prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology”, featured the orally available small molecule ANAVEX ® 3-71 (AF710B ).
In October 2023 a peer-reviewed publication in the journal Neurobiology of Aging , titled ‘ Early treatment with an M1 and sigma-1 receptor agonist prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology ’, featured the orally available small molecule ANAVEX ® 3-71 (AF710B).
The data from the AVATAR trial was released in February 2022. The clinical trial met all primary and secondary efficacy and safety endpoints, with consistent improvements in primary efficacy endpoint, RSBQ response (p = 0.037), and secondary efficacy endpoints, ADAMS (p = 0.010) and CGI-I (p = 0.037) response.
The data from the AVATAR trial was released in February 2022. The clinical trial met all primary and secondary efficacy and safety endpoints, with consistent improvements in primary efficacy endpoint, RSBQ response (p = 0.037), and secondary efficacy endpoints, Anxiety, Depression, and Mood Scale (ADAMS) (p = 0.010) and CGI-I (p = 0.037) response.
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.
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.
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.
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 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.
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.
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.
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. This patent is expected to expire in June 2036, absent any patent term extension for regulatory delays. The fourth of these four patents claims method of making certain crystalline forms ANAVEX ® 2-73.
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.
All four 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.
Based on these results, and ANAVEX ® 3-71’s pre-clinical profile, we intend to advance ANAVEX ® 3-71 into a biomarker-driven clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect of treatment with ANAVEX ® 3-71.
Based on these results, and ANAVEX ® 3-71’s pre-clinical profile, we intend to advance ANAVEX ® 3-71 into a biomarker-driven clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect of treatment with ANAVEX ® 3-71. Schizophrenia In March 2024, we commenced the U.S.
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.
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.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition 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 to market the same drug for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.
Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. 25 If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition 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 to market the same drug for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.
Pre-clinical tests revealed significant neuroprotective benefits (i.e., protects nerve cells from degeneration or death) through the modulation of endoplasmic reticulum, mitochondrial and oxidative stress, which damages and impairs cell viability.
ANAVEX ® 1-41 ANAVEX ® 1-41 is a sigma-1 agonist. Pre-clinical tests revealed significant neuroprotective benefits (i.e., protects nerve cells from degeneration or death) through the modulation of endoplasmic reticulum, mitochondrial and oxidative stress, which damages and impairs cell viability.
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.
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. 15 In July 2020, we commenced the first Phase 1 clinical trial of ANAVEX ® 3-71.
There are also requirements governing the submission of certain clinical trials and completed trial results to public registries. Sponsors of certain clinical trials of FDA-regulated products are required to register and disclose specified clinical trial registration and results information, which is made publicly available at www.clinicaltrials.gov. Failure to properly report clinical trial results can result in civil monetary penalties.
Sponsors of certain clinical trials of FDA-regulated products are required to register and disclose specified clinical trial registration and results information, which is made publicly available at www.clinicaltrials.gov. Failure to properly report clinical trial results can result in civil monetary penalties.
In November 2019, the FDA granted to ANAVEX ® 2-73 the Rare Pediatric Disease (RPD) designation for the treatment of Rett syndrome. The RPD designation is intended to encourage the development of treatments for rare pediatric diseases.
In November 2019, the FDA granted ANAVEX ® 2-73 the Rare Pediatric Disease (RPD) designation for the treatment of Rett syndrome. The RPD designation is intended to encourage the development of treatments for rare pediatric diseases. Further, in February 2020, the FDA granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett syndrome.
Patent with claims directed to methods of treating cardiac dysfunction with ANAVEX ® 2-73. This patent is expected to expire in July 2038, absent any patent term extension for regulatory delays. Additionally, we own one issued U.S. Patent with claims directed to methods of treating insomnia or anxiety with ANAVEX ® 2-73, ANAVEX ® 19-144, and/or ANAVEX ® 1-41.
Further, we own one issued U.S. patent with claims directed to methods of treating cardiac dysfunction with ANAVEX ® 2-73. This patent is expected to expire in July 2038, absent any patent term extension for regulatory delays. Additionally, we own two issued U.S. patent for the treatment of insomnia, anxiety, or agitation.
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.
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.
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.
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.
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.
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.
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.
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 our approach to the treatment of Alzheimer’s disease and other CNS diseases differs from our competitors - our platform may offer a disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of SIGMAR1. In our preclinical studies, when activated by SIGMAR1 agonists, such as ANAVEX ® 2-73, SIGMAR1 demonstrated reduced cellular stress before and after RNA gene transcription.
Our platform may offer a disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of SIGMAR1. In our preclinical studies, when activated by SIGMAR1 agonists, such as ANAVEX ® 2-73, SIGMAR1 demonstrated reduced cellular stress before and after RNA gene transcription.
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.
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 2024, an estimated 6.9 million Americans are suffering from Alzheimer’s disease according to the Alzheimer’s Association ® .
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, to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.
Significant improvements were seen on all measures tested: behavioral, histopathological, and neuroinflammatory endpoints. 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, to study the effect of the compound on both the cognitive and motor impairment of 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. 31 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.
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.
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.
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).
This Phase 2b/3 trial design incorporates inclusion of genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a trial. 14 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 tuberous sclerosis complex (TSC).
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.
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.
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.
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.
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.
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.
For ANAVEX ® 2-73, ANAVEX ® 19-144, ANAVEX ® 1-41, and ANAVEX ® 1066, we also have granted or pending applications in Australia, Canada, China, Europe, Japan, and Hong Kong, which are expected to expire after 2035.
All three patents are expected to expire in November 2036, absent any patent term extension for regulatory delays. For ANAVEX ® 2-73, ANAVEX ® 19-144, ANAVEX ® 1-41, and ANAVEX ® 1066, we also have granted or pending applications in Australia, Canada, China, Europe, Japan, and Hong Kong, which are expected to expire after 2035.
With regard to a fast track product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
With regard to a fast track product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA. 24 Any product submitted to the FDA for approval, including a product with a fast track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.
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.
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.
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.
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 medications that are categorized as older traditional anti-epileptic drugs and second-generation anti-epileptic drugs.
Our competitors may have significantly greater financial resources, an established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, may be in the process of obtaining regulatory approvals and marketing of approved products.
We also face competition from academic institutions and government agencies, both in the United States and abroad. Our competitors may have significantly greater financial resources, an established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, may be in the process of obtaining regulatory approvals and marketing of approved products.
Efficacy endpoints demonstrated statistically significant and clinically meaningful reductions in Rett syndrome symptoms. Convenient once daily oral liquid doses of up to 30 mg of ANAVEX ® 2-73 were also well tolerated with good medication compliance. All patients who participated in the trial were eligible to receive ANAVEX ® 2-73 under a voluntary open label extension protocol.
Efficacy endpoints demonstrated statistically significant and clinically meaningful reductions in Rett syndrome symptoms. Convenient once daily oral liquid doses of up to 30 mg of ANAVEX ® 2-73 were also well tolerated with good medication compliance.
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.
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 functional (ADCS-ADL) scores.
Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer side effects, are more convenient or are less expensive than any products that we may develop.
Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer side effects, are more convenient or are less expensive than any products that we may develop. We believe our approach to the treatment of Alzheimer’s disease and other CNS diseases differs from our competitors.
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.
In addition to these 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. The trial was completed in mid-2022 and, in December 2022, the Company presented topline results from the Phase 2b/3 clinical trial.
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.
We believe that we have good relations with our employees. Available Information Our internet website address is www.anavex.com. 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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

89 edited+40 added−13 removed245 unchanged
Biggest changeWe may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our research and development activities; ● Even if our products are approved, we may not be able to generate significant revenues from or successfully commercialize them, which will adversely affect our financial results and financial condition and we will have to delay or terminate some or all of our research and development plans which may force us to cease operations; ● If we or any companion diagnostic collaborator of ours are unable to timely develop and obtain regulatory approval for companion diagnostic tests for our drug candidates, we may not realize the commercial potential of our drug candidates; ● Regulatory authorities may not accept data from our trials conducted outside the United States; ● Fast Track designation or breakthrough therapy designation that we have received or may seek out may not actually lead to a faster FDA review and approval process; 32 ● We may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity; ● If we fail to demonstrate efficacy in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially adversely affected; ● If we do not obtain the support of qualified scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material adverse effect on our business; ● We may not be able to develop, market or generate sales of our products to the extent anticipated.
Biggest changeWe may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our research and development activities; 32 · We will need additional funding and may be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and development activities; · Even if our products are approved, we may not be able to generate significant revenues from or successfully commercialize them, which will adversely affect our financial results and financial condition and we will have to delay or terminate some or all of our research and development plans which may force us to cease operations; · Our research and development plans require substantial additional future funding which could impact our operations and financial condition; · If we or any companion diagnostic collaborator of ours are unable to timely develop and obtain regulatory approval for companion diagnostic tests for our drug candidates, we may not realize the commercial potential of our drug candidates; · The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, which could lead to our inability to generate product revenue; · Regulatory authorities may not accept data from our trials conducted outside the United States; · Fast Track designation or breakthrough therapy designation that we have received or may seek out may not actually lead to a faster FDA review and approval process; · We may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity; · If we fail to demonstrate efficacy in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially adversely affected; · If a particular product candidate causes undesirable side effects, then we may be unable to receive regulatory approval of or commercialize such product candidate; · Wea re highly dependent on our key personnel and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy; · If we do not obtain the support of qualified scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material adverse effect on our business; · We may not be able to develop, market or generate sales of our products to the extent anticipated.
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.
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.
Restrictions under applicable U.S. federal, state and foreign healthcare laws and regulations include, but are not limited to, the following: ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, including any kickback, bribe or rebate, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase or lease, order or recommendation of, any item, good, facility or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; ● U.S. federal civil and criminal false claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal and civil penalties, including those from civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government; ● The Stark Law 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.
Restrictions under applicable U.S. federal, state and foreign healthcare laws and regulations include, but are not limited to, the following: ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, including any kickback, bribe or rebate, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase or lease, order or recommendation of, any item, good, facility or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; 50 ● U.S. federal civil and criminal false claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal and civil penalties, including those from civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government; ● The Stark Law 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.
Assuming that we are successful in developing our potential drug compounds and receiving regulatory clearances to market our products, our ability to successfully penetrate the market and generate sales of those products may be limited by a number of factors, including the following: ● If our competitors receive regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer; ● Information from our competitors or the academic community indicating that current products or new products are more effective or offer compelling other benefits than our future products could impede our market penetration or decrease our future market share; and ● The pricing and reimbursement environment for our future products, as well as pricing and reimbursement decisions by our competitors and by payers, may have an effect on our revenues.
Assuming that we are successful in developing our potential drug compounds and receiving regulatory clearances to market our products, our ability to successfully penetrate the market and generate sales of those products may be limited by a number of factors, including the following: ● If our competitors receive regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer; 43 ● Information from our competitors or the academic community indicating that current products or new products are more effective or offer compelling other benefits than our future products could impede our market penetration or decrease our future market share; and ● The pricing and reimbursement environment for our future products, as well as pricing and reimbursement decisions by our competitors and by payers, may have an effect on our revenues.
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.
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.
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.
The market price for our common stock may be influenced by many factors, including the following: 53 ● 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.
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.
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; ● 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; 36 ● 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; 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.
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.
The development of neurodegenerative and CNS therapies presents unique challenges, including an imperfect understanding of the biology, the presence of the blood brain barrier, or BBB, that can restrict the flow of drugs to the brain, a frequent lack of translatability of preclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.
The development of neurodegenerative and CNS therapies presents unique challenges, including an imperfect understanding of the biology, the presence of the blood brain barrier that can restrict the flow of drugs to the brain, a frequent lack of translatability of preclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.
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 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.
Raising 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.
Raising funds at lower prices would severely dilute existing or future investors; · 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Our stock price has been volatile at certain times historically, and may be volatile in the future. We may incur rapid and substantial increases or decreases in our stock price in the foreseeable future that are do not coincide in timing with the disclosure of news or developments by us.
Our stock price has been volatile at certain times historically, and may be volatile in the future. We may incur rapid and substantial increases or decreases in our stock price in the foreseeable future that do not coincide in timing with the disclosure of news or developments by us.
If we fail to become profitable, we may suspend or cease operations. We will need additional funding and may be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and development activities.
If we fail to become profitable, we may suspend or cease operations. 35 We will need additional funding and may be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and development activities.
In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and research and development credits to offset its post-change income may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and research and development credits to offset its post-change income may be limited.
Although we intend to obtain product liability insurance, which we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover claims.
Although we intend to obtain product liability insurance, which we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover such claims.
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.
We may not be able to obtain broader scope patent protection for ANAVEX ® 2-73 as a single drug or in other jurisdictions. 55 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.
Our contracts with third parties upon which we may rely, may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
Our contracts with third parties upon whom we may rely, may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
In the course of our business, we, or third parties upon which we rely, may gather, collect, receive, use, transmit, store/retain or dispose of data and confidential information (such as confidential employee information or health-related data), sensitive data, intellectual property and trade secrets.
In the course of our business, we, or third parties upon whom we rely, may gather, collect, receive, use, transmit, store/retain or dispose of data and confidential information (such as confidential employee information or health-related data), sensitive data, intellectual property and trade secrets.
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.
During the year ended September 30, 2024 and 2023, 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.
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.
Competitors may interfere with our patenting process in a variety of ways. Competitors may claim that we are 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.
Our business may fail and investors could lose all their investment in our Company; ● None of our potential drug compounds may reach the commercial market and our business may fail; ● Our technologies and future products may be rendered undesirable or obsolete 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; ● We have advanced our research and development efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited success in product development; ● Our reliance on third parties may result in delays in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements with them or non-compliance with regulations; ● If we fail to compete with respect to partnering, licensing, mergers, acquisitions, joint venture and other collaboration opportunities, our ability to research and develop our potential drug compounds may be limited; ● The use of any of our products in clinical trials may expose us to liability claims, 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; ● Continuing regulatory obligations and ongoing regulatory review may result in additional expense.
Our business may fail and investors could lose all their investment in our Company; · None of our potential drug compounds may reach the commercial market and our business may fail; · Material modifications in the methods of product candidate manufacturing may result in additional costs or delay; · Our technologies and future products may be rendered undesirable or obsolete 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; · We have advanced our research and development efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited success in product development; · Our reliance on third parties may result in delays in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements with them or non-compliance with regulations; 33 · If we fail to compete with respect to partnering, licensing, mergers, acquisitions, joint venture and other collaboration opportunities, our ability to research and develop our potential drug compounds may be limited; · The use of any of our products in clinical trials may expose us to liability claims, 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; · Continuing regulatory obligations and ongoing regulatory review may result in additional expense.
If we receive a patent of narrow scope, then it may be possible for competitors to design products that do not infringe our patent(s). 4. Anavex is seeking patent protection for a number of indications, combination products and drug regimens.
If we receive a patent of narrow scope, then it may be possible for competitors to design products that do not infringe our patent(s). 4. We are seeking patent protection for a number of indications, combination products and drug regimens.
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.
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 us less attractive to potential partners. 56 5. Defending a patent lawsuit takes significant time and can be very expensive. 6.
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.
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, 2024, we have accumulated a deficit of approximately $336 million.
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.
To date, we have funded our operations primarily through private placement of our equity securities, through issuances of shares under 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, or, historically, through draws under our “at-the-market offering” in connection with the Amended and Restated Sales Agreement with Cantor Fitzgerald & Co. and SVB Leerink LLC (the “Sales Agents”), pursuant to which we could offer and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents.
If we are unable to protect the confidentiality of our trade secrets, our business would be harmed; ● Intellectual property infringement claims may adversely affect our development and commercialization efforts; ● We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers; ● Obtaining and maintaining our patent protection depends on compliance with various requirements imposed by governmental patent agencies.
If we are unable to protect the confidentiality of our trade secrets, our business would be harmed; 34 · Intellectual property infringement claims may adversely affect our development and commercialization efforts; · We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers; · We may become involved in lawsuits to protect or enforce our patents or other intellectual property; Obtaining and maintaining our patent protection depends on compliance with various requirements imposed by governmental patent agencies.
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).
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). 49 Additionally, in connection with the ongoing conflict between Russia and Ukraine, the U.S. government and European Union countries have imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia.
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.
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.
We may be subject to claims challenging the inventorship of our patents and other intellectual property. We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor.
We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor.
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.
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.
In addition, even if any product candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.
In addition, even if any product candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
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.
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.
Our common stock may become the target of a “short squeeze.” Securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company.
There can be no guarantee that our stock price will remain at current prices. 54 Our common stock may become the target of a “short squeeze.” Securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company.
To receive an Advance Overseas Finding, the expenses must have been for eligible research and development activities, as determined by AusIndustry, and the expenditures must have a scientific link to the Australian activities, be unable to be conducted in Australia and the total actual and reasonably anticipated overseas costs must be expected to be less than the total actual and reasonably anticipated expenditures for activities conducted within Australia, as determined by AusIndustry at the time of application for an Advance Overseas Finding (“OSF”).
To receive an Advance Overseas Finding, the expenses must have been for eligible research and development activities, as determined by AusIndustry, and the expenditures must have a scientific link to the Australian activities, be unable to be conducted in Australia and the total actual and reasonably anticipated overseas costs must be expected to be less than the total actual and reasonably anticipated expenditures for activities conducted within Australia, as determined by AusIndustry at the time of application for an Advance Overseas Finding (“OSF”). 48 This OSF binds both AusIndustry and the Commissioner of Taxation for three income years.
Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. 61 In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain.
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.
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.
Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.
If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements.
If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring ANAVEX ® 2-73 or our other product candidates to market.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring ANAVEX ® 2-73 or our other product candidates to market. 60 We may be subject to claims challenging the inventorship of our patents and other intellectual property.
We may decide to suspend further testing on our potential drug compounds if, in the judgment of our management and advisors, the non-clinical test results do not support further development.
This additional testing will increase program expenses and extend timelines. We may decide to suspend further testing on our potential drug compounds if, in the judgment of our management and advisors, the non-clinical test results do not support further development.
Collectively, efforts by pharmaceutical companies in the field of neurodegenerative, neurodevelopmental and CNS disorders have seen very limited successes in product development.
We have advanced our research and development efforts on addressing neurodegenerative, neurodevelopmental and CNS disorders. Collectively, efforts by pharmaceutical companies in the field of neurodegenerative, neurodevelopmental and CNS disorders have seen very limited successes in product development.
This OSF binds both AusIndustry and the Commissioner of Taxation for three income years. However, for compliance purposes, specific issue guidance jointly issued by AusIndustry and the ATO in 2014 provides that an OSF can apply for the duration of the overseas activity provided the activities are not new or materially different then the activities described in the OSF.
However, for compliance purposes, specific issue guidance jointly issued by AusIndustry and the ATO in 2014 provides that an OSF can apply for the duration of the overseas activity provided the activities are not new or materially different than the activities described in the OSF.
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.
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.
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.
Our ability to use our net operating loss (“NOL”) carryforwards and certain tax credit carryforwards may be subject to limitation. As of September 30, 2024, we had approximately $128.5 million of U.S. federal and $16.9 million of state and local NOL carryforwards. We had approximately $16.6 million of NOL carryforwards in Australia as of the same period.
Under FDA policies, a compound is eligible for priority review, or review within a six-month time frame from the time a complete NDA is accepted for filing, if the compound provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease.
Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures. 40 Under FDA policies, a compound is eligible for priority review, or review within a six-month time frame from the time a complete NDA is accepted for filing, if the compound provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease.
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.
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.
If certain non-clinical data reveals potential safety issues or the results are inconsistent with an expectation of the potential drug compound’s efficacy in humans, the regulatory agencies may require additional more rigorous testing before allowing human clinical trials. This additional testing will increase program expenses and extend timelines.
Regulatory agencies evaluate these data carefully before they will approve clinical testing in humans. If certain non-clinical data reveals potential safety issues or the results are inconsistent with an expectation of the potential drug compound’s efficacy in humans, the regulatory agencies may require additional more rigorous testing before allowing human clinical trials.
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.
Our competitors may independently develop equivalent knowledge, methods and know-how. 59 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.
Changes in patent law could impair our ability to protect our product candidates; ● We may become involved in lawsuits to protect or enforce our patents or other intellectual property; and ● We may fail to protect our intellectual property rights or the confidentiality of our trade secrets.
Changes in patent law could impair our ability to protect our product candidates; and · We may fail to protect our intellectual property rights or the confidentiality of our trade secrets. Changes in patent law could diminish the value of our patents and patent applications in general.
There is no assurance that our future operations will result in profits. If we cannot generate sufficient revenues, we may suspend or cease operations. We are an early clinical stage company and have not generated any revenues to date and have no operating history.
If we cannot generate sufficient revenues, we may suspend or cease operations. We are an early clinical stage company and have not generated any revenues to date and have no operating history.
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.
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 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.
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. Fast Track designation or breakthrough therapy designation may not actually lead to a faster FDA review and approval process.
Cyberattacks, malicious internet-based activity, online and offline fraud and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
Cyberattacks, malicious internet-based activity, online and offline fraud and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon whom we rely. We, and the third parties upon whom we may rely, may be subject to a variety of these evolving threats.
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.
We may not be able to enter into arrangements with another diagnostic company to develop and obtain regulatory approval for 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, 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.
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.
Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional prior to administering our drug candidates. If any of these events were to occur, our business and growth prospects would be harmed materially.
Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional prior to administering our drug candidates.
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.
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. There is no assurance that our future operations will result in profits.
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.
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.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially. 57 Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book.
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.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a 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.
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.
Any of these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or payment of major milestones and other payments. 37 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.
Our compounds could be subject to restrictions on marketing or withdrawal from the market, and we may be subject to penalties when and if any of them are approved; ● We receive Australian government research and development income tax incentive refunds.
Our compounds could be subject to restrictions on marketing or withdrawal from the market, and we may be subject to penalties when and if any of them are approved; · Changes in funding for the FDA, the SEC and other government agencies could prevent these agencies from performing normal functions on which the operations of our business may rely, which could negatively affect our business; · We receive Australian government research and development income tax incentive refunds.
If we are unable to timely adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance post-marketing, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.
If we are unable to timely adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance post-marketing, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability. 47 Finally, we cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
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.
The Company terminated the Sales Agreement in July 2024. 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.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. 58 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.
For example, changes in our understanding of the appropriate population of patients who should be treated with a targeted therapy like we are developing may limit the drug’s market potential if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy.
For example, changes in our understanding of the appropriate population of patients who should be treated with a targeted therapy like we are developing may limit the drug’s market potential if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy. 44 We have advanced our research and development efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited success in product development.
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.
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. 46 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.
Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent, or a manufacturer of generic drugs may challenge the listing.
We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent, or a manufacturer of generic drugs may challenge the listing.
Each clinical phase is designed to test attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout the overall clinical program. The failure to demonstrate efficacy in our clinical trials would have a material adverse effect on our future business prospects, financial condition and operating results.
Each clinical phase is designed to test attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout the overall clinical program.
Our inability to promptly obtain coverage and adequate reimbursement from third-party payors for the product candidates, and for us or our collaborators to obtain coverage and adequate reimbursement for related companion diagnostic tests that may be developed, could have a material and adverse effect on our business, financial condition, results of operations and prospects.
Our inability to promptly obtain coverage and adequate reimbursement from third-party payors for the product candidates, and for us or our collaborators to obtain coverage and adequate reimbursement for related companion diagnostic tests that may be developed, could have a material and adverse effect on our business, financial condition, results of operations and prospects. 52 Risks Related to our Common Stock A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations and would severely dilute existing or future investors if we were to raise funds at lower prices.
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.
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.
In February 2020, the FDA granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett syndrome. Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the ability to submit a rolling application for regulatory review.
For some of our compounds, including ANAVEX ® 2-73, we hope to benefit from the FDA’s Fast Track and priority review programs. In February 2020, the FDA granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett syndrome.
This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S.
Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S.
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 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. Material modifications in the methods of product candidate manufacturing may result in additional costs or delay.
If we fail to demonstrate efficacy in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially adversely affected. The success of our research and development efforts will be greatly dependent upon our ability to demonstrate potential drug compound efficacy in non-clinical studies, as well as in clinical trials.
The success of our research and development efforts will be greatly dependent upon our ability to demonstrate potential drug compound efficacy in non-clinical studies, as well as in clinical trials. Non-clinical studies involve testing potential drug compounds in appropriate non-human disease models to demonstrate efficacy and safety.

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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 $10,000 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 $11,000 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. 60 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeThere are no other proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, or any associate of such persons, is an adverse party or has a material interest adverse to our or our subsidiaries’ interest. 63 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
ITEM 3. LEGAL PROCEEDINGS We know of no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which our Company or our subsidiary is a party or of which any of their property is subject.
We know of no other material pending legal or governmental proceedings, other than ordinary routine litigation incidental to our business, to which our Company or our subsidiaries are a party or of which any of their property is subject.
Added
ITEM 3. LEGAL PROCEEDINGS The Company is subject to claims and legal proceedings that arise during the course of business. The Company is currently subject to the following lawsuits: On March 13, 2024, a shareholder class action complaint was filed in the United States District Court for the Southern District of New York. The complaint is captioned Blum v.
Added
Anavex Life Sciences, Corp. et al., case number 1:24-cv-01910, and it named the Company and Christopher Missling as Defendants. The complaint alleges violations of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect to certain clinical trials for ANAVEX ® 2-73 related to Rett syndrome (the “March 2024 Complaint”).
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At a hearing on or about June 13, 2024, the Court named another purported Company shareholder, Quintessa Huey, as lead plaintiff with respect to the March 2024 Complaint.
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An Amended Complaint was filed by the appointed lead plaintiff on July 12, 2024, which asserts allegations related to purported violations of Section 10(b) of the Securities Exchange Act tied to disclosures associated with the same clinical trials related to Rett Syndrome, and which names the Company and Christopher Missling as defendants.
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The Amended Complaint seeks unspecified damages, as well as costs, including counsel and expert witness fees, on behalf of class of investors who purchased stock of the Company on the NASDAQ during the period February 1, 2022 through January 1, 2024. The defendants filed a motion to dismiss the complaint.
Added
The motion to dismiss is fully-briefed and awaiting a decision by the Court. On May 8, 2024, a similar complaint was filed in the same court by Kenneth Downing (case no. 1:2024-cv-03529), a purported shareholder of the Company, against the same defendants as the March 2024 Complaint. The defendants filed a motion to dismiss the complaint.
Added
Plaintiff Downing voluntarily dismissed his complaint subsequent to the filing of the motion to dismiss. On or about May 13, 2024, a derivative lawsuit was filed against the Company (as nominal defendant), Christopher Missling, and members of the Company’s Board of Directors in the U.S. District Court for the District of Nevada by another purported shareholder named Denise Deangelis.
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The complaint asserts various common law claims (including breach of fiduciary duty) and violation of Section 14(a) of the Securities Exchange Act regarding the same or similar allegations at issue in the two purported class action lawsuits related to disclosures and statements made about certain clinical trials related to Rett Syndrome.
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The parties are currently due to file a proposed schedule for the anticipated motion to dismiss by the Company and Christopher Missling (the other named defendants have not been served with the complaint) on or before January 15, 2025.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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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
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 64 PART II 64 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 64 ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 64 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 70 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA F-1 ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL MATTERS 71 ITEM 9A. CONTROLS AND PROCEDURES 71 ITEM 9B OTHER INFORMATION 71 ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 71 PART III 72 ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 72 ITEM 11. EXECUTIVE COMPENSATION 77 ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. 83 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 86 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 87 PART IV 88 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 88

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, 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.
Biggest changeThese decreases were largely offset by the following increases in research and development expenditures over the comparable fiscal 2023 financial year: (i) an increase in personnel costs of $3.4 million related to the addition of new employees including new additions to the Company’s leadership team, and expenses related to the engagement of consultants to assist in the preparation of the submission of our Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA); (ii) an increase of approximately $3.6 million over the comparable period relating to manufacturing activities of ANAVEX ® 2-73 for potential commercial use, and to support the MAA; and (iii) an increase of $2.2 million over the comparable period relating to expenditures on the ANAVEX ® 3-71-SZ-001 clinical trial, which trial commenced in the second quarter of fiscal 2024. 65 The following table summarizes our research and development expenses for the years ended September 30, 2024, and 2023 (in thousands): 2024 2023 Costs of external service providers $ 21,974 $ 22,542 Personnel costs 13,676 10,264 Share-based compensation 5,813 10,812 Other common costs 375 99 Total research and development costs $ 41,838 $ 43,717 External service provider cost by product candidate was as follows (in thousands): 2024 2023 ANAVEX ® 2-73 $ 17,572 $ 19,540 ANAVEX ® 3-71 3,748 2,624 All other product candidates 150 6 Other external service provider costs 504 372 Total external service provider costs $ 21,974 $ 22,542 General and administrative expenses were $11.0 million for the fiscal 2024 financial year, as compared to $12.0 million in fiscal 2023.
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.
The 2023 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.
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.
The 2023 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 2023 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 2023 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.
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.
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. Financial Operations Overview We are in the development stage and have not earned any revenues since our inception in 2004.
The fair value of all share purchase options and warrants are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital. Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis.
The fair value of all share purchase options and warrants are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital. Compensation costs for share-based payments with graded vesting are recognized on a straight-line basis.
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.
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. 64 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.
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.
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 2023 Purchase Agreement.
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.
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 2023 Purchase Agreement. There are no limits on the price per share that Lincoln Park may pay to purchase Common Stock under the 2023 Purchase Agreement.
Stock-based compensation expense is adjusted for actual forfeitures of unvested awards as they occur. We have granted share purchase option awards that vest upon achievement of certain performance criteria, or milestone-based awards.
Share-based compensation expense is adjusted for actual forfeitures of unvested awards as they occur. We have granted share purchase option awards that vest upon achievement of certain performance criteria, or milestone-based awards.
Controlled Equity Offering Sales Agreement On May 1, 2020, we entered into an Amended and Restated Sales Agreement (the “Sales Agreement”) 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 (the “At-the-Market Offering”).
Controlled Equity Offering Sales Agreement On May 1, 2020, we entered into an Amended and Restated Sales Agreement (the “2020 Sales Agreement”) with Cantor Fitzgerald & Co. and SVB Leerink LLC (the “Sales Agents”), pursuant to which we could offer and sell shares of Common Stock registered under an effective registration statement from time to time through the Sales Agents (the “At-the-Market Offering”).
Personnel costs include salaries and wages, benefits, and non-cash stock-based compensation charges associated with options and other equity awards granted to employees and consultants who are directly engaged in support of our research and development activities. General and administrative expenses consist of personnel costs, expenses for outside professional services and expenses associated with operating as a public company.
Personnel costs include salaries and wages, benefits, and non-cash share-based compensation charges associated with options and other equity awards granted to employees and consultants who are directly engaged in support of our research and development activities. General and administrative expenses consist of personnel costs, expenses for outside professional services and expenses associated with operating as a public company.
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 share-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.
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.
Recent Sales of Unregistered Securities Since the beginning of our fiscal year ended September 30, 2024, 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.
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.
Personnel costs consist of salaries and wages, benefits and share-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.
The most significant of these accounting policies relates to the accounting for our research and development expenses and stock-based compensation expense. Research and Development Expenses Research and development costs are expensed as incurred.
The most significant of these accounting policies relates to the accounting for our research and development expenses and share-based compensation expense. Research and Development Expenses Research and development costs are expensed as incurred.
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.
Due to these risks and uncertainties, we expense the acquisition of patents and trademarks. 69 Share-based Compensation We account for all share-based payments and awards under the fair value-based method.
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.
During fiscal 2024, we recorded $2.3 million in research and development incentive income, consisting of the Australian research and development incentive credit administered through the ATO, in connection with fiscal 2024 eligible expenditures. In comparison, research and development incentive income for fiscal 2023 was $2.7 million in connection with fiscal 2023 eligible expenditures.
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).
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.
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.
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. 67 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”).
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.
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 December 23, 2024, there were approximately 48 stockholders of record, and 84,815,517 shares of our common stock were issued and outstanding.
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).
Cash flow provided by financing activities Cash provided by financing activities in fiscal 2024 was $12.0 million, comprised of $11.3 attributable to cash received from the issuance of common shares at various market prices under the 2023 Purchase Agreement (as defined below) and $0.7 million received pursuant to the exercise of stock options.
Application of Critical Accounting Policies Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management ’ s application of accounting policies.
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management ’ s application of accounting policies.
RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements and their possible effect on our results, see Note 2 to our Consolidated Financial Statements found elsewhere in this Annual Report. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We invest our excess cash in investment-grade, interest-bearing securities.
RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements and their possible effect on our results, see Note 2 to our Consolidated Financial Statements found elsewhere in this Annual Report. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies. 70
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.
We expect to see our research and development expenditures increase from current levels as we advance our clinical programs, including continuation of ANAVEX ® 3-71 trial in Schizophrenia and subsequent advancements, planned advancement of ANAVEX ® 2-73 for Parkinson ’ s disease, planned initiation of an ANAVEX ® 2-73 for a Fragile X clinical trial, and as we continue to grow our staffing to manage and support these clinical initiatives.
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.
Cash Flows Following is a summary of sources of cash flows for the years ended September 30, 2024 and 2023 (in thousands) 2024 2023 Cash flows used in operating activities $ (30,812 ) $ (27,785 ) Cash flows provided by financing activities 11,975 29,651 (Decrease) increase in cash $ (18,837 ) $ 1,866 Cash flow used in operating activities There was an increase in cash used in operating activities of $3.0 million during fiscal 2024.
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.
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. 68 Application of Critical Accounting Policies Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.
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.
Comparison of year ended September 30, 2024 to year ended September 30, 2023 Operating Expenses Our operating expenses for fiscal 2024 decreased to $52.9 million, from $55.8 million in fiscal 2023.
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.
The primary reason for the increase in other income was due to a one-time financing charge of $0.9 million recognized in the comparable year associated with entering into the 2023 Purchase Agreement (as described below), as well as an increase in interest income in fiscal 2024 earned on cash and cash equivalents, due to an increase in market wide interest rates year over year.
During fiscal year 2021, the Company issued to Lincoln Park an aggregate of 4,086,209 shares of common stock under the 2019 Purchase Agreement, including 4,007,996 shares of common stock for an aggregate purchase price of $24.1 million and 78,213 commitment shares.
During the year ended September 30, 2024, the Company issued to Lincoln Park an aggregate of 2,455,646 shares of Common Stock under the 2023 Purchase Agreement, including 2,450,000 shares of Common Stock for an aggregate purchase price of $11.3 million and 5,646 commitment shares.
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 provided by financing activities in fiscal 2023 was $29.7 million, comprised of $27.9 million attributable to cash received from the issuance of common shares under the 2023 Purchase Agreement and $1.8 million received pursuant to the exercise of stock options.
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.
Net loss Net loss for fiscal 2024 was $43.0 million, or $0.52 per share, compared to a net loss of approximately $47.5 million, or $0.60 per share for fiscal 2023. 66 Liquidity and Capital Resources Working Capital (in thousands) 2024 2023 Current Assets $ 135,567 $ 154,386 Current Liabilities 15,304 12,534 Working Capital $ 120,263 $ 141,852 At September 30, 2024, we had $132.2 million in cash and cash equivalents, a decrease from $151.0 million at September 30, 2023.
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.
The primary reason for the decrease in general and administrative expenses was a reduction in share-based compensation charges of $1.9 million, as a result of the vesting of previous option awards and the extended timeline of milestone based vesting awards.
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.
On September 30, 2024, an amount of $110.8 million remained available under the 2023 Purchase Agreement.
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.
No shares were sold during the years ended September 30, 2024 and 2023 under the 2020 Sales Agreement. The Company terminated the 2020 Sales Agreement on July 24, 2024.
Removed
During fiscal 2023, our personnel costs increased to $10.3 million from $8.0 million as a result of our expanded team.
Added
The decrease is attributable to a modest decrease in research and development expenses of $1.9 million (4.3%) to $41.8 million in fiscal 2024 as well as a small decrease in general and administrative expenses of $1.0 million (8.3%) to $11.0 million in fiscal 2024, as more fully described below.
Removed
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.
Added
During fiscal 2024, we experienced an overall decrease in total research and development expenses over the comparable fiscal 2023 financial year.
Removed
Cash for operations was generated through the issuance of shares of common stock under the financing arrangements described below.
Added
The decreases were largely due to: (i) a decrease in share-based compensation expense of $5.0 million as a result of the vesting of previous option awards and a change in estimated vesting dates associated with performance-based option awards; (ii) a decrease of approximately $3.5 million relating to our Rett syndrome program as a result of the completion of the EXCELLENCE trial and the respective open label extension; and (iii) a decrease of approximately $1.2 million in expenditures over the comparable period relating to our Alzheimer’s program, as a result of the completion of the Phase 2b/3 clinical trial and its related open label extension.
Removed
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.
Added
Other income (net) Net other income for the year ended September 30, 2024 was $9.9 million as compared to $8.3 million for fiscal 2023.
Removed
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 ”).
Added
This income is driven by the clinical trial expenditures incurred in Australia, and the decrease is a result of the completion of the EXCELLENCE trial in Rett Syndrome and the Phase 2b/3 clinical trial in Alzheimer ’ s disease, as well as related open label extension trials, which were completed during fiscal 2024.
Removed
Upon delivery of a placement notice based on our instructions and subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell shares of common stock by methods deemed to be an “at the market offering”, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to our prior written consent.
Added
We expect to continue to receive support from the Australian government for future clinical trials which we plan to conduct, in part, within Australia.
Removed
We are not obligated to make any sales of shares under the Sales Agreement. We or the Sales Agents may suspend or terminate the At-the-Market Offering upon notice to the other party, subject to certain conditions.
Added
The principal reason for this is an increase in net cash expenses, after taking into account non-cash share-based compensation, over the comparable period of approximately $3.3 million.
Removed
The Sales Agents will act as agents on a commercially reasonable efforts basis consistent with their normal trading and sales practices, applicable state and federal law, and rules and regulations and the rules of Nasdaq.
Added
During the year ended September 30, 2023, the Company issued to Lincoln Park an aggregate of 3,288,943 shares of Common Stock under the 2023 Purchase Agreement, including 3,275,000 shares of Common Stock for an aggregate purchase price of $27.9 million and 13,943 commitment shares as well as the 75,000 initial commitment shares.
Removed
We have agreed to pay the Sales Agents’ commissions for their services of 3.0% of the gross proceeds from the sale of shares of Common Stock pursuant to the Sales Agreement. We have also agreed to provide the Sales Agents with customary indemnification and contribution rights.
Removed
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.
Removed
Concurrently with the execution of the 2019 Purchase Agreement in 2019, we issued 324,383 shares of our common stock to Lincoln Park as a fee for its commitment to purchase shares of our common stock under the 2019 Purchase Agreement and became obligated to issue up to 162,191 shares pro rata, when and if Lincoln Park purchased, at our discretion, the $50.0 million aggregate commitment.
Removed
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.
Removed
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%.
Removed
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.
Removed
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.
Removed
Due to the uncertain timing of expected payments in foreign currencies, we do not utilize any forward exchange contracts. All foreign transactions settle on the applicable spot exchange basis at the time such payments are made.
Removed
Volatile market conditions and supply chain shortages may result in significant changes in exchange rates, and in particular a change in foreign currencies values relative to the U.S. dollar may affect our operating expenses as expressed in U.S. dollars. An adverse movement in foreign exchange rates could have a material effect on payments made to foreign suppliers.
Removed
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.
Removed
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.
Removed
We do not believe that inflation has had a material impact on our results of operations during the periods presented. 68

Other AVXL 10-K year-over-year comparisons