Matthew Haines - River East IR Christopher Missling - CEO Sandra Boenisch - Principal Financial Officer

Jason Kolbert - Maxim Mitchell Kapor - Rodman & Renshaw

Welcome to the Anavex Life Sciences Fiscal 2016 Result Conference Call. My name is Sherry and I’ll be your operator for today’s call. At this time all participants are in a listen-only mode. Later we will conduct a Question-and-Answer session. Please note that this conference is being recorded. I would now like to turn the call over to Matt Haines, River East Investor Relations.

Thank you, Sherry and good afternoon everyone. We appreciate your joining us today for Anavex Life Sciences conference call and webcast. Our agenda is to review the company’s financial results for fiscal 2016 and key corporate developments. A taped replay of this call will be available approximately two hours after the call’s conclusion and will remain available for two weeks. The call will also be available for replay on Anavex’s Web site www.anavex.com. With us today is Dr. Christopher Missling, President and Chief Executive Officer and Sandra Boenisch, Principal Financial Officer. Christopher and Sandra will make prepared remarks, and then we will take questions from our covering analysts. Before we begin, please note that during this course of this conference call the company will make some projections and forward-looking statements regarding future events. We encourage you to review the company’s filings with the SEC. This includes without limitation the company’s Form 10-K and 10-Q which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include without limitation risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital, and maintenance of intellectual property rights. And with that I’d like to turn the call over to Christopher.

Thank you, Matt. I’d like to thank everyone for joining us on the call today and is our very first conference call to review financial results and clinical progress with investors. I’m pleased to have the opportunity to share our exciting accomplishments from 2016, and give you a sense of some key milestones to look forward to for 2017. As a reminder, for those of you who do may be new to Anavex, we are clinical stage biotechnology company, our focus is on developing effective targeted therapies for the treatment of neurodevelopmental and neurodegenerative diseases under the precision medicine paradigms. A bit about the market, neurodegenerative users including Alzheimer’s, Parkinson’s and Multiple Sclerosis, which represent major unmet medical needs globally. With respect to Alzheimer’s there are just four drugs currently approved by the FDA. These drugs only temporarily slow the worsening of symptoms for six months, in roughly 50% of the patients. The economic burden of Alzheimer’s disease is forecasted to reach approximately $1.5 trillion annually by 2050 as the population continues to age. Neurodevelopmental diseases including Rett syndrome, infantile spasm, altruism [indiscernible] and epilepsy also represents significant unmet medical needs. Briefly to our technology, our lead compound is ANAVEX 2-73, an orally available small molecule activating the sigma-1 receptor. Through sigma-1 activation, ANAVEX 2-73 helps to restore cellular homeostasis in both neurodegenerative and neurodevelopmental diseases. This includes reduction of protein misfolding, reduction of mitochondrial dysfunction, reduction of oxidative stress, modulate of calcium signaling to provide a protection and reduction of inflammation. The [technical difficulty] think about that what we are doing is, we are enabling to body’s own defense mechanism to address the cellular problems called by chronic central nervous system diseases, irrespective of the likely root cause. A Phase 2a clinical trial for ANAVEX 2-73 in mild to moderate Alzheimer’s patients has been concluded in November 2016. We are now preparing for larger Phase 2/3 Alzheimer’s clinical trial for ANAVEX 2-73. In addition to Alzheimer’s, we have other targeted indications for ANAVEX 2-73. We have preclinical validation for Parkinson disease, Rett Syndrome, altruism [indiscernible], Multiple Sclerosis, depression, anxiety, epileptic seizures and infantile spasm. We are also in the planning stages for a Phase 2, trickle [ph] trials in Rett Syndrome and a Phase 2 clinical trial in Parkinson. Importantly we have received FDA Orphan Drug Designation for ANAVEX 2-73 for Rett Syndrome and infantile spasm. We have also received FDA Orphan Drug Designation for ANAVEX 3-71, another compound in our pipeline for frontotemporal dementia. Obtaining Orphan Drug Designation for this indications were important accomplishments by our regulatory team in 2016. This is because it potentially reduces the cost of development and the timeline to commercialization. As you may know, the FDA usually grants Orphan Drug status to drug candidates being developed for the treatment of so called rare diseases. This means there are fewer than 200,000 patients in the U.S. with less specific rare disease. This status will allow us to enjoy seven years of market exclusivity in the U.S. upon regulatory approval. Moreover, Anavex will be eligible to receive certain development and commercial incentive including prioritized consultation with the FDA on clinical studies as well as exemptions from or reductions in regulatory fees. Now that I’ve given you a general overview of Anavex, I’d like to have Sandra Boenisch, our Principal Financial Officer, discuss our financial results for the fiscal year ended September 30, 2016. Then I’ll come back to discuss our various accomplishments for 2016 and anticipated milestone for 2017. With that let me turn the call over Sandra.

Thank you, Christopher. Good afternoon. During 2016, we maintained a strong financial provision with what we believe to be adequate cash resources and no debt. We continue to be prudent in controlling costs and focusing our resources on advancing the most promising program that we believe will add value for the company and its shareholders. This will ensure we have the resources necessary to execute on our 2017 business plan and beyond. Currently, Anavex have cash of over $17.3 million. As of the end of the fiscal 2016, Anavex had cash of $9.2 million compared with $15.3 million as of the end of fiscal 2015. During fiscal year 2016, the company used 9.2 million in cash to fund operations, this was within the company’s cash fund guidance. Operating expenses for the year ended September 30, 2016 were $15.6 million, which included $5.1 million in non-cash charges, compared to $7.1 million for the comparable period in fiscal year 2015. The increase was primarily attributable to the ongoing clinical trial, preclinical work, and expansion of the Company’s team. The net loss for the fiscal year was $14.7 million or $0.42 per share, compared to a net loss of $12.1 million, or $0.65 per share, for fiscal 2015. With that, I’d like to turn the call back over to Christopher.

Thank you, Sandra. First, we were very pleased to report positive 57 week safety and exploratory efficacy data from our Phase 2a clinical trial with ANAVEX 2-73 in Alzheimer’s disease. These results were recently presented at CTAD on Saturday. The study met those primary and secondary endpoints. This study is being conducted under FDA guidelines, productive trial and population pharmacokinetic design. This means we need fewer patients, it requires less duration of treatment and have a greater likelihood of demonstrating an effect of the drug and more information on the treatment effect and our broad and better dose response information and subgroup analysis effect The net result is a more efficient study then conventional studies and the optimization of trial parameters of success in a larger or in larger future studies. In terms of the Phase 2a study results after 57 week of treatment reported at the CTAD conference in San Diego on December 10, that ANAVEX 2-73 continued to demonstrate an excellent safety profile. There were no clinical significant treatment related adverse events, and no serious adverse events. So most common adverse events, which occurred only at the highest doses where mild dizziness and mild headache, similar to the safety profile seen in healthy volunteers in the Phase I trial. As such this is a very positive and encouraging result. In addition ANAVEX 2-73 showed a favorable safety, bioavailability, dose-response curve and tolerability/risk profile and a continued stabilization of congestion and daily living scores as measured by standard test including the mini mental score examination and activities or daily living, as well as Cogstate and [indiscernible] P300 scores. This correlation was positive with all measured scores. In addition despite a relatively small sample size, the dose response analysis seems to indicate a cognitive benefit, including the measurements of Cogstate, mini mental score examination and P300. These scores improved significantly after just five weeks of treatment and importantly have been largely sustained through 57 weeks of present so far, despite the fact the patients were not optimally dosed. In addition, we have seen statistical significant reduction in insomnia anxiety and other symptoms commonly associated with Alzheimer’s. We know of no other approved experimental drug that has shown similar results or sustained improvement that we reported at the CTAD conference this last week in San Diego. These include antibodies targeting amyloid beta. We believe the significant sustained improvements, we have reported are especially impressive given that patients like those enrolled in our trials inevitably declined over even shorter periods of time. We look forward to advancing now ANAVEX 2-73 in to a larger Phase 2/3 placebo controlled clinical trial in 2017. In addition to presenting Phase 2a clinical trial data, we continue to present positive preclinical safety and efficacy data at scientific conferences throughout the year 2016. These conferences included the following. On February 19, we presented preclinical data with ANAVEX 2-73 in multiple sclerosis at the Americas Committee for Treatment & Research in New Orleans. On February 25, we presented positive preclinical results in Rett syndrome at the 2016 Epilepsy Pipeline Conference in San Francisco. On March 07, we presented ANAVEX 3-71 preclinical data at the 14th International Symposium on advances in Alzheimer’s and we reported a statistically significant reduction in the rate of cognitive deficit, amyloid beta, pathology and inflammation in animal model. On May 18, we announced positive preclinical data for ANAVEX 2-73 in infantile spasm. Treatment with ANAVEX 2-73 significantly reduced the number of spasm in an animal model with infantile spasm or epileptic spasm in infant rats. On June 06, we presented positive preclinical data with ANAVEX 2-73 in Fragile X, autism related disorder at the Gordon Research Conferences for Fragile X and autism related disorder in Mount Snow, Vermont. On June 23rd, we presented preclinical data for ANAVEX 2-73 at the 2016 Rett Syndrome Symposium in Rett syndrome, anxiety, epilepsy, infantile spasm, Fragile X and autism related disorders. The presentations highlighted the underlying commonalities within neurodevelopmental indications. On July 24 and July 27 respectively, we presented two posters at the Alzheimer’s Association International Conference 2016 in Toronto. The presentation included positive 31 week safety and exploratory efficacy data from the ongoing Phase 2a Alzheimer’s clinical trial including cognitive improvements seen in the patients. On September 22nd, we presented preclinical data demonstrating that ANAVEX 2-73 restored function in a classical animal model of Parkinson disease. Significant improvements were seen on all measures behavioral, [indiscernible] pathological and neuroinflammatory endpoints. We are grateful for the generous support we have received from the Michael J Fox Foundation for this work and look forward to continuing to work together. Also on September 28, we entered into a material transfer agreement with Biogen under which Biogen will test ANAVEX lead drug candidate, ANAVEX 2-73 in an oligodendrocyte precursor cell or OPC differentiation assay. A satisfactory result from the oligodendrocyte precursor cell assay study mainly to vivo demyelination study using a chemical demyelination model. There is no cost to Anavex for the test as Biogen is not a vendor that companies can pay to do experiments. From the perspective of strengthening our scientific rigor in Parkinson disease on November 30, we announced the addition of three prominent researchers in Parkinson disease and other center nervous system diseases to the company Scientific Advisory Board. This brings our total numbers higher than before, the additional Scientific Advisory Board members include Tanya Simuni, MD Director of Parkinson Disease and Movement Disorders program at Northwestern University, Chicago, Illinois. Daniel Weintraub, Medical Doctor Assistance, Professor of Psychiatry at University of Pennsylvania Philadelphia. And Kalpana Merchant Ph.D Adjunct Professor of Neurology at Northwestern University School of Medicine and Adjunct Professor of Biology of University Portland Oregon. So I think everyone can see that 2016 was indeed a year of stronger accomplishments on many fronts. For 2017, we remained focused on several important objectives. First, we will continue to advance our key clinical and preclinical programs in asthma, Parkinson and other central nervous system indication including rare disease indications such as Rett Syndrome. These includes initiating a larger Phase 2/3 clinical trials for ANAVEX 2-73 in asthma, a Phase 2 trial in Rett Syndrome and clinical trial initiation in Parkinson disease. So, in summary we are entering into 2017 with a stronger balance sheet, our strength in corporates and scientific advisory team coupled with recently reported encouraging 57 week safety and tolerability date for ANAVEX 2-73 which restore cellular homeostasis in our Phase 2a clinical in Alzheimer disease. We are now analyzing the significant correlations observed between cognition function and behavior in combination with population from kinetic modeling of the population as well as of each individual patient in order to derive the optimal parameters for the subsequent planned placebo controlled efficacy trials. We believe this coherent approach should reduce future clinical development risk. Given the strengthened financial resources and scientific validation, in 2017 we are able to prepare for the Phase 2/3 placebo controlled trial in Alzheimer disease as well as our placebo controlled Phase 2 trial in Rett Syndrome for which the U.S. Food and Drug Administration granted Orphan Drug Designation for ANAVEX 2-73 and a Phase 2 placebo controlled trial in Parkinson disease. 2016 has been a very productive period for Anavex and we have numerous preclinical and clinical business development milestone ahead of us. We look forward to updating you as we advance our key programs. I would like now to open the call for question. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Jason Kolbert of Maxim.

Just like review a couple of things, let’s start on fundamentals and science. If you could recap for me kind of what happened at the recent Alzheimer’s conference. I’d like to better understand why Dr. George Perry was so excited in his comments. And if I understand what you were saying, all of the various scores whether it was the MMSE, ADCS showed stabilization of patients, but in reality what you’re saying is that in this early study you’re seeing signals of efficacy. So can you just talk a little bit about kind of your expectations from the current one year data set and then what the implications of that data would be as you start to plan, what I assume is going to be a pivotal trial for 2-73?

Thank you for the question. So the answer to the question is that, of course I’d like to invite to look up the other company’s data, but what has been intriguing for Professional Perry was that there are true elements here. So first of all, a disease which is degenerative in nature, means that you’re continuously declined in all function and we saw here a leveling of these declines. So basically no significant decline. That means if you do take the drug at whatever level you are early or later you seem to stabilize that stage. That is already an accomplishment which is better than any other drug has been shown, when you look at the trajectories of solar [ph] or other antibodies. The other thing is that we did identify so called very good responders even in this not optimally dosed situation and they have improved the cognition scores and function significantly and that has been described in the presentation from Saturday. And we are actually now looking into those, I would say, improved scores. That means they not only stabilize the disease, they actually improved from where they started from. So that is extremely impressive and that is what Dr. Perry’s reaction. So we will learn exactly what are the features of these patients, which will allow us now to optimally design the patient population in the future trial, since we obviously are measuring against a placebo control, which will have standard of care, so we want to make sure that the delta between the decline and of now the stabilization or even improvement is as high as possible.

I understand, thank you. I think for me Chris it’s very helpful to understand some of the mechanism of the action behind 2-73 in a theory that this protects against misfolding proteins and oxidative stress versus some of the recent failures that had more to do with beta amyloid and cal proteins. Could you expand a little bit on about that mechanistically [ph], so we can just appreciate the difference between the approaches of 2-73 versus the approach of some of the other drugs that have failed in this space?

Sure, I can try. We do believe that the Alzheimer’s disease is very complex. We do not believe that a beta is the wrong target, we actually are consistent with the -- a better hypothesis. We are just adding the parameters of complexity to a higher level. That means we believe there is most likely a combined effect of a better aggregation as well as Tau, as well as calcium, as well as inflammation, as well as mitochondria. So we are agnostic to any of those. So whatever hypothesis you are basically following, we are covering that and the difference is that we do not micromanage the pathology, we macro-manage it. And it’s a bit like using the intelligence what has been learned from the oncology -- colleagues from the oncology field. They have now moved on to instead of targeting specific cancer cells directly to supporting the body’s own defense mechanism and allowing then the body to help is a much better knowledgeable fighter for doing this job, and we are doing exactly the same, we are translating or transferring this approach to central nervous system and our basically, fire truck if you like, is the cigma-1 receptor which restores hemostasis. And as a consequence we see and we have shown that in our preclinical animal model, that our compound decrease A-beta, decrease Tau, but also decreased inflammation, Mitochondrial dysfunction and calcium imbalance, while the antibodies only target the A-beta aggregation and maybe not even sufficiently and the key differentiation factor is not the specific target, but the way it’s done. We have now heard that it’s confounding that some A-beta forms or shape are actually protective and some are not. So which one is it, and the A-beta antibodies don’t really differentiate. We are not making the judgment call, we are allowing the body to make that call and who knows best how to take care of themselves than the body itself. So that’s why our approach is more upstream and utilizing the stimulation own body’s capacity to regain functionality and as a consequence we noticed restoration of function and also in cognition.

Chris, close with me a little bit on given where you are now, what’s the next expected major catalyst that we should we focusing on for the next 12 to 18 months? And then couple that with the fact that you have 17 million in cash at the close of the period?

So that cash position will allow us to be able to run around almost two years without requiring any additional cash and the advantage of this approach now as you can see from the indications which I mentioned today like Rett Syndrome or Parkinson, those are indications which trials are usually in the range of 12 weeks or three months and not longer. So, now we have the ability to work and move forward with the compound ANAVEX 2-73 in those indications in parallel and as a consequence we have obviously a shorter trial duration and if we are able to start this trial relatively soon we might be able to even have data by yearend 2017, but this depends on how quickly we can start those trials. But we are very on it and we are like to obviously move forward as reasonably as quickly as possible.

Chris, thank you very much. We really appreciate you having public conference calls and allowing us to kind of dig into some of the details, very well done. Thank you.

Thank you. You’re welcome.

And our next question is from Raghuram Selvaraju of Rodman & Renshaw.

Hello, this is Mitchell Kapor I’m calling on behalf of Ram Selvaraju. I just wanted to ask a few questions here. Number one, the Phase 2 trial of ANAVEX 2-73 in Rett Syndrome, potentially be usable as a pivotal study, if data is positive from this trial or is it simply unlikely to be powered to demonstrate a statistically significant impact? What are the efficacy end points for use in Rett Syndrome trial? Number two, when in 2017 would the Alzheimer’s, Rett Syndrome and Parkinson’s trial start. Would they all initiate enrollment around the same time or would they be staggered? And my last question is, what is likely to be the all-in cost for these trials? Thank you.

We have planned the Phase 2 trial in Rett Syndrome to be a placebo blinded controlled doubled controlled study. We have already manufactured the compound for the patients. We have not yet -- we’re not in a position to specifically give the starting point, but as I mentioned before we like to start as soon as we can. And resources allow us to run those in parallel so there will be no distraction from a resources point of view. And the question about the pivotal study, it is the -- it is not unheard of that a rare disease, especially since ANAVEX 2-73 has received Orphan Drug Designation, might be able and that is depending on the outcome. So when there is really an extremely strong effect which the FDA deems as significant enough to allow the -- to the patients to access this drug, after this one trial. It has been not unheard of, this to happen.

Okay. Thank you very much. I really appreciate that.

You’re welcome.

And that is all the time for we have for question. At this time, I would like to turn the call over to back to Dr. Missling for closing remarks.

Thank you all for participating in today’s conference call. I hope you are as excited as we are about the great progress we’ve made and the prospect for 2017. We will continue to work very hard to advance our program and build shareholder value. Should you need additional information or have any questions, please visit our website at www.anavex.com. This concludes our remarks for today and thank you very much and I give back to the operator.

Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.