What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2021-02-16 · 1278 added, 322 removed, 63 unchanged (96% of the section changed)

FINANCIAL STATEMENTS

LIFE SCIENCES CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

31, 2020 and September 30, 2020

cash equivalents

ANAVEX LIFE SCIENCES CORP.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

ANAVEX LIFE SCIENCES

INTERIM CONDENSED CONSOLIDATED

BALANCE SHEETS

March 31, 2021 and September 30, 2020

September 30,

Cash and cash equivalents

Incentive and tax receivables

Prepaid expenses and

Liabilities and Stockholders'

Prepaid expenses and deposits

Liabilities and Stockholders’

Current Liabilities

Accounts payable

Commitments and Contingencies

Accrued liabilities

Deferred grant income

Total Liabilities

Commitments and Contingencies - Note 5

Capital stock

10,000,000 preferred

stock, par value $ 0.001 per share

100,000,000 common

stock, par value $ 0.001 per share

10,000,000 preferred stock, par value $0.001 per share

100,000,000 common stock, par value $0.001 per share

Issued and outstanding:

1 unchanged sentence

(September 30, 2020 - 62,045,198)

Additional paid-in

Additional paid-in capital

Accumulated deficit

(175,687,517 )

(159,677,230 )

Stockholders' Equity

Liabilities and Stockholders' Equity

LIFE SCIENCES CORP .

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

the three months ended December 31, 2020 and 2019

months ended December 31,

Total Stockholders’

Total Liabilities and Stockholders’

See Accompanying Notes to Condensed Consolidated Interim

Financial Statements

ANAVEX LIFE SCIENCES CORP.

INTERIM CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

For the three and six months ended

March 31, 2021 and 2020

Three months ended March 31,

Six months ended March 31,

Operating expenses

and administrative

and development

General and administrative

Research and development

Total operating expenses

2 unchanged sentences

Other income (expenses)

Research and development

incentive income

Interest (expense)

exchange gain, net

other income, net

Net loss before provision

for income taxes

Research and development incentive income

Interest income, net

Foreign exchange gain (loss), net

Total other income, net

Net loss before provision for income taxes

(15,924,018 )

(13,819,408 )

tax expense, current

loss and comprehensive loss

Income tax expense, current

Net loss and comprehensive loss

$ (8,155,222 )

$ (7,236,697 )

$ (16,010,287 )

$ (13,828,622 )

Net Loss per share

Basic and diluted

Weighted average number of shares outstanding

LIFE SCIENCES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

the three months ended December 31, 2020 and 2019

Cash Flows used in

Operating Activities

Basic and diluted

See Accompanying Notes to Condensed Consolidated Interim

Financial Statements

ANAVEX LIFE SCIENCES

INTERIM CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

For the six months ended March 31, 2021 and 2020

Cash Flows used in Operating Activities

$ (16,010,287 )

$ (13,828,622 )

Adjustments to reconcile

net loss to net cash used in operations:

Adjustments to reconcile net loss to net cash used in operations:

Stock-based compensation

Changes in non-cash

working capital balances related to operations:

Changes in non-cash working capital balances related to operations:

Incentive and tax receivables

( 1,728,467 )

( 1,087,927 )

Prepaid expenses and

Prepaid expenses and deposits

Accounts payable

Net cash used in operating

Accrued liabilities

Deferred grant income

Net cash used in operating activities

(15,188,223 )

(10,988,051 )

Cash Flows provided

by Financing Activities

Cash Flows provided by Financing Activities

Issuance of common shares

Net cash provided by

financing activities

Increase in cash and

cash equivalents during the period

and cash equivalents, beginning of period

and cash equivalents, end of period

LIFE SCIENCES CORP.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

the three months ended December 31, 2020 and 2019

Share issue costs

Proceeds from exercise of stock options

Net cash provided by financing activities

Increase in cash and cash equivalents during the period

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

See Accompanying Notes to Condensed Consolidated Interim

Financial Statements

ANAVEX LIFE SCIENCES

INTERIM CONDENSED CONSOLIDATED

STATEMENT OF CHANGES IN STOCKHOLDERS’

For the three months ended March 31, 2021 and 2020

Balance, January 1, 2021

$ 213,766,108

$ (167,532,295 )

Shares issued under 2019 Purchase Agreement

Purchase shares

Commitment shares

Shares issued upon exercise of options

Shares issued under Sales Agreement, net of share issue costs

Share based compensation

Balance, March 31, 2021

$ 251,427,781

$ (175,687,517 )

Balance, January 1, 2020

$ 165,891,753

$ (139,988,685 )

Shares issued under 2019 Purchase Agreement

Purchase shares

Commitment shares

Share based compensation

Balance, March 31, 2020

$ 171,958,462

$ (147,225,382 )

See Accompanying Notes to Condensed Consolidated Interim

Financial Statements

ANAVEX LIFE SCIENCES

INTERIM CONDENSED CONSOLIDATED

STATEMENT OF CHANGES IN STOCKHOLDERS’

For the six months ended

March 31, 2021 and 2020

Balance, October 1, 2020

1 unchanged sentence

$ (159,677,230 )

Shares issued under

2019 purchase agreement

Shares issued under 2019 purchase agreement

Purchase shares

Commitment shares

Shares issued under

Sales Agreement, net of shares issue costs

Shares issued upon exercise of options

Shares issued under Sales Agreement, net of share issue costs

Share based compensation

1 unchanged sentence

(16,010,287 )

Balance, December

Balance, March 31, 2021

$ 251,427,781

3 unchanged sentences

$ (133,396,760 )

Shares issued under

2019 purchase agreement

Shares issued under 2019 Purchase Agreement

Purchase shares

3 unchanged sentences

(13,828,622 )

Balance, December

Balance, March 31, 2020

$ 171,958,462

$ (147,225,382 )

1 Business Description and Basis of Presentation

Life Sciences Corp.

(“Anavex” or the “Company”) is a clinical stage biopharmaceutical company engaged

in the development of differentiated therapeutics by applying precision medicine to central nervous system (“CNS”)

diseases with high unmet need.

Anavex analyzes genomic data from clinical studies to identify biomarkers, which are used to select

patients that will receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental diseases.

Company’s lead compound ANAVEX ® 2-73 is being developed to treat Alzheimer’s disease, Parkinson’s

disease and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological

monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).

of Presentation

unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the

Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America

GAAP”) for interim reporting.

Accordingly, certain information and note disclosures normally included in the

annual financial statements in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the disclosures are adequate to make the information presented not misleading.

accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring

adjustments, which in the opinion of management are necessary for fair presentation of the information contained herein.

The consolidated

balance sheet as of September 30, 2020 was derived from the audited annual financial statements but does not include all disclosures

required by U.S.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction

with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K

for the year ended September 30, 2020 filed with the SEC on December 28, 2020.

The Company follows the same accounting policies

in the preparation of interim reports.

results for the three months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the

year ending September 30, 2021.

of the Company’s potential drug compounds are in the clinical development stage and the Company cannot be certain that its

research and development efforts will be successful or, if successful, that its potential drug compounds will ever be approved

for sales to pharmaceutical companies or generate commercial revenues.

See Accompanying Notes to Condensed Consolidated Interim

Financial Statements

Note 1 Business Description and Basis of Presentation

Anavex Life Sciences Corp.

(“Anavex”

or the “Company”) is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics

by applying precision medicine to central nervous system (“CNS”) diseases with high unmet need.

Anavex analyzes genomic data

from clinical studies to identify biomarkers, which are used to select patients that will receive the therapeutic benefit for the treatment

of neurodegenerative and neurodevelopmental diseases.

The Company’s lead compound ANAVEX ®

2-73 is being developed

to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases, including rare diseases,

such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein

2 (“MECP2”).

Basis of Presentation

These unaudited interim condensed consolidated

financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”)

and accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim reporting.

certain information and note disclosures normally included in the annual financial statements in accordance with U.S.

GAAP have been condensed

or omitted pursuant to such rules and regulations.

In the opinion of management, the disclosures are adequate to make the information

presented not misleading.

These accompanying unaudited interim condensed

consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management

are necessary for fair presentation of the information contained herein.

The consolidated balance sheet as of September 30, 2020 was derived

from the audited annual financial statements but does not include all disclosures required by U.S.

The accompanying unaudited interim

condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes

thereto included in the Company’s annual report on Form 10-K for the year ended September 30, 2020 filed with the SEC on December

The Company follows the same accounting policies in the preparation of interim reports.

Operating results for the six months ended

March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending September 30, 2021.

All of the Company’s potential drug

compounds are in the clinical development stage and the Company cannot be certain that its research and development efforts will be successful

or, if successful, that its potential drug compounds will ever be approved for sales to pharmaceutical companies or generate commercial

To date, we have not generated any revenues from our operations.

The Company expects the business to continue to experience negative cash flows for the foreseeable future and cannot predict when,

if ever, our business might become profitable.

1 Business Description and Basis of Presentation – (Continued)

Company believes that its existing cash and cash equivalents, along with existing financial commitments from third parties, will

be sufficient to meet its cash commitments for at least two years after the date that these interim condensed consolidated financial

statements are issued.

The process of drug development can be costly, and the timing and outcomes of clinical trials is uncertain.

assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change.

amount of the Company’s expenditures will vary depending upon a number of factors including but not limited to the design,

timing and duration of future clinical trials, the progress of the Company’s research and development programs and the level

of financial resources available.

The Company has the ability to adjust its operating plan spending levels based on the timing

of future clinical trials.

than our rights related to the 2019 Purchase Agreement and the Sales Agreement (each as defined below in Note 4), there can be

no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially

reasonable terms.

If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it

will be forced to delay or scale down some or all of its research and development activities.

December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China.

In March 2020, the World

Health Organization (“WHO”) declared COVID-19 to be a global pandemic as a result of the rapid spread of the virus

beyond its point of origin.

global outbreak of COVID-19 continues to rapidly evolve as of the date these interim condensed consolidated financial statements

As such, it is uncertain as to the full magnitude that the outbreak will have on the Company’s financial condition

and future results of operations.

Management is actively monitoring the global situation on its business, including on its clinical

trials and operations and financial condition.

The effects of COVID-19 did not have a material impact on the Company’s result

of operations or financial condition for the period ended December 31, 2020.

However, given the daily evolution of the COVID-19

situation, and the global responses to curb its spread, the Company is not able to estimate the effects COVID-19 may have on its

future results of operations or financial condition.

preparation of financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and

expenses in the reporting period.

The Company regularly evaluates estimates and assumptions related to accounting for research

and development costs, valuation and recoverability of deferred tax assets, asset impairment, stock-based compensation, and loss

contingencies.

The Company bases its estimates and assumptions on current facts, historical experience, and various other factors

that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the

carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.

To the extent

there are material differences between the estimates and the actual results, future results of operations will be affected.

1 Business Description and Basis of Presentation – (Continued)

of Consolidation

consolidated financial statements include the accounts of Anavex Life Sciences Corp.

and its wholly-owned subsidiaries, Anavex

Australia Pty Limited.

(“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH,

a company incorporated under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province

of Ontario, Canada.

The Company expects the business to continue to experience

negative cash flows for the foreseeable future and cannot predict when, if ever, our business might become profitable.

Note 1 Business Description and Basis of Presentation –

The Company believes that its existing

cash and cash equivalents, along with existing financial commitments from third parties, will be sufficient to meet its cash commitments

for up to three years after the date that these interim condensed consolidated financial statements are issued.

The process of drug development

can be costly, and the timing and outcomes of clinical trials is uncertain.

The assumptions upon which the Company has based its

estimates are routinely evaluated and may be subject to change.

The actual amount of the Company’s expenditures will vary depending

upon a number of factors including but not limited to the design, timing and duration of future clinical trials, the progress of the Company’s

research and development programs and the level of financial resources available.

The Company has the ability to adjust its operating

plan spending levels based on the timing of future clinical trials.

Other than our rights related to the Sales

Agreement (as defined below in Note 4), there can be no assurance that additional financing will be available to us when needed or, if

available, that it can be obtained on commercially reasonable terms.

If the Company is not able to obtain the additional financing on

a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its research and development activities.

In December 2019, a novel strain of coronavirus,

COVID-19, was reported to have surfaced in Wuhan, China.

In March 2020, the World Health Organization declared COVID-19 to be a global

pandemic as a result of the rapid spread of the virus beyond its point of origin.

The global outbreak of COVID-19 continues

to rapidly evolve as of the date these interim condensed consolidated financial statements are issued.

As such, it is uncertain as to

the full magnitude that the outbreak will have on the Company’s financial condition and future results of operations.

is actively monitoring the global situation on its business, including on its clinical trials and operations and financial condition.

The effects of COVID-19 did not have a material impact on the Company’s result of operations or financial condition for the period

ended March 31, 2021.

However, given the daily evolution of the COVID-19 situation, and the global responses to curb its spread, the Company

is not able to estimate the effects COVID-19 may have on its future results of operations or financial condition.

The preparation of financial statements

in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period.

The Company regularly

evaluates estimates and assumptions related to accounting for research and development costs, valuation and recoverability of deferred

tax assets, asset impairment, stock-based compensation, and loss contingencies.

The Company bases its estimates and assumptions on current

facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which

form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are

not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from the Company’s

To the extent there are material differences between the estimates and the actual results, future results of operations will

Note 1 Business Description and Basis of Presentation –

Principles of Consolidation

These consolidated financial statements

include the accounts of Anavex Life Sciences Corp.

and its wholly-owned subsidiaries, Anavex Australia Pty Limited., a company incorporated

under the laws of Australia, Anavex Germany GmbH, a company incorporated under the laws of Germany, and Anavex Canada Ltd., a company

incorporated under the laws of the Province of Ontario, Canada.

All inter-company transactions and balances have been eliminated.

Value Measurements

fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last

unobservable, that may be used to measure fair value which are the following:

1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for

identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable

or whose significant value drivers are observable;

3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that

are significant to the fair value of the assets or liabilities.

book value of cash and cash equivalents and accounts payable and accrued liabilities approximate their fair values due to the

short-term maturity of those instruments.

December 31, 2020 and September 30, 2020, the Company did not have any Level 3 assets or liabilities.

The fair value hierarchy under GAAP is

based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure

fair value which are the following:

Level 1 - quoted

prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - observable

inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar

assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value

drivers are observable;

Level 3 - assets

and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair

value of the assets or liabilities.

The book value of cash and cash equivalents

and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of those instruments.

At March 31, 2021 and September 30, 2020,

the Company did not have any Level 3 assets or liabilities.

and Diluted Loss per Share

income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average

number of common shares outstanding during the period.

Diluted income/(loss) per common share is computed by dividing net income/(loss)

available to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period,

(2) the dilutive effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect

of other potentially dilutive securities.

For purposes of the diluted net loss per share calculation, options and warrants are

potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would

be anti-dilutive.

of December 31, 2020, loss per share excludes 11,801,266 (September 30, 2020 – 10,576,266 ) potentially dilutive common shares

related to outstanding options and warrants, as their effect was anti-dilutive.

2 Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results

of operations, financial position or cash flow.

3 Other Income

the year ended September 30, 2017, the Company was awarded grant funding in the amount of $ 597,886 .

The grant was received in

equal quarterly installments over a period of two years ending during the year ended September 30, 2020, in exchange for a commitment

to complete clinical testing for a therapeutic drug candidate for the treatment of Rett syndrome.

grant income was deferred when received and amortized to other income as the related research and development expenditures were

The Company recognized $ 74,944 of this grant on its statement of operations within grant income during the three-month

period ended December 31, 2019.

and development incentive income

and development incentive income represents the receipt by the Company’s Australian subsidiary, of the Australian research

and development incentive credit, (the “ATO R&D Credit”).

the three months ended December 31, 2020, the Company recorded research and development incentive income of $ 1,269,316 (AUD 1,735,962 )

$ 943,215 (AUD 1,345,000 )) in respect of the ATO R&D Credit for eligible research and development expenses incurred

during the period.

4 Equity Offering Agreements

Basic income/(loss) per common share is

computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during

Diluted income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the sum

of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive effect of the assumed exercise of

options and warrants using the treasury stock method and (3) the dilutive effect of other potentially dilutive securities.

of the diluted net loss per share calculation, options and warrants are potentially dilutive securities and are excluded from the calculation

of diluted net loss per share because their effect would be anti-dilutive.

As of March 31, 2021, loss per share excludes

11,505,199 (September 30, 2020 –

10,576,266) potentially dilutive common shares related to outstanding options and warrants, as

their effect was anti-dilutive.

Note 2 Recent Accounting Pronouncements

Recent Accounting Pronouncements Not

The Company does not expect the adoption

of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flows.

Note 3 Other Income

During the six months

ended March 31, 2021, the Company received $497,931 of a $995,862 research grant awarded by the Michael J.

Fox Foundation for Parkinson’s

The grant will be used to fund a clinical trial in the Company’s lead compound, ANAVEX ®

2-73 for the treatment

of Parkinson’s disease.

The grant income

is being deferred when received and amortized to other income as the related research and development expenditures are incurred.

the three and six months ended March 31, 2021, the Company recognized $10,820 and $10,820, respectively (2020:

$0 and $0, respectively)

of this grant on its statements of operations within grant income.

During the year

ended September 30, 2017, the Company was awarded grant funding in the amount of $597,886.

The grant was received in equal quarterly installments

over a period of two years ending during the year ended September 30, 2020, in exchange for a commitment to complete clinical testing

for a therapeutic drug candidate for the treatment of Rett syndrome.

The grant income

was deferred when received and amortized to other income as the related research and development expenditures were incurred.

three and six months ended March 31, 2020, the Company recognized $74,944 and $149,888, respectively of this grant on its statements of

operations within grant income.

Research and Development

Incentive Income

Research and development

incentive income represents the receipt by the Company’s Australian subsidiary, of the Australian research and development incentive

credit, (the “ATO R&D Credit”).

the three and six months ended March 31, 2021, the Company recorded research and development incentive income of $960,879 (AUD 1,244,133)

and $2,230,195 (AUD 2,980,095) (2020:

$717,328 (AUD 1,203,000) and $1,660,543 (AUD 2,548,000)), respectively, in respect of the ATO R&D

Credit for eligible research and development expenses incurred during the period.

Note 4 Equity Offering Agreements –

2019 Purchase Agreement

June 7, 2019, the Company entered into a $ 50,000,000

purchase agreement (the “2019 Purchase

Agreement”) with Lincoln Park, as amended on July 1, 2020 , pursuant to which the Company had the right to sell and issue

to Lincoln Park, and Lincoln Park was obligated to purchase, up to $ 50,000,000

in value of its shares of common stock

from time to time from June 12, 2019, the date a prospectus supplement under which shares of common stock issuable under the 2019

Purchase Agreement was filed with the SEC, until such date as the Company directed Lincoln Park to purchase the $50,000,000 aggregate

commitment, or July 1, 2022.

consideration for entering into the 2019 Purchase Agreement, the Company issued to Lincoln Park 324,383 shares of common stock

as a commitment fee and agreed to issue up to 162,191 shares pro rata, when and if, Lincoln Park purchased at the Company’s

discretion the $50,000,000 aggregate commitment.

the three months ended December 31, 2020, the Company issued to Lincoln Park an aggregate of 3,402,930 (2019 – 4,429,835 )

shares of common stock under the 2019 Purchase Agreement, including 3,346,288 (2019:

4,394,160 ) shares of common stock for an

aggregate purchase price of $ 17,461,402 (2019:

On June 7, 2019, the Company entered into

a $50,000,000 purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park, as amended on July 1, 2020, pursuant to

which the Company had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $50,000,000 in value

of its shares of common stock from time to time over a three-year period until July 1, 2022.

In consideration for entering into the

2019 Purchase Agreement, the Company issued to Lincoln Park 324,383 shares of common stock as a commitment fee during the year ended September

30, 2019 and agreed to issue up to 162,191 shares pro rata, when and if, Lincoln Park purchased, at the Company’s discretion, the

$50,000,000 aggregate commitment.

During the six months ended March 31,

2021, the Company issued to Lincoln Park an aggregate of 4,086,209 (2020 –

6,014,425) shares of common stock under the 2019 Purchase

Agreement, including 4,007,996 (2020:

5,964,584) shares of common stock for an aggregate purchase price of $24,111,198 (2020:

and 78,213 (2020:

49,841) commitment shares.

At December 31, 2020,

an amount of $ 6,649,794 (September 30, 2020:

$ 24,111,197 ) remained available under the 2019 Purchase Agreement.

4 Equity Offering Agreements – (Continued)

Company entered into a Controlled Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020

(the “Sales Agreement”) with Cantor Fitzgerald & Co.

and SVB Leerink LLC (together the “Sales Agents”),

pursuant to which the Company may offer and sell shares of common stock registered under an effective registration statement from

time to time through the Sales Agents (the “Offering”).

delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the Sales

Agreement, the Sales Agents may sell the Shares by methods deemed to be an “at the market offering” 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 the prior written consent of the Company.

is not obligated to make any sales of Shares under the Sales Agreement.

The Company or Sales Agents may suspend or terminate the

offering of Shares upon notice to the other party, subject to certain conditions.

The Sales Agents will act as agent on

a commercially reasonable efforts basis consistent with their normal trading and sales practices and applicable state and federal

law, rules and regulations and the rules of Nasdaq.

Company has agreed to pay the Sales Agents commissions for their services of up to 3.0 % of the gross proceeds from the sale of

the Shares pursuant to the Sales Agreement.

The Company also agreed to provide the Sales Agents with customary indemnification

and contribution rights.

During the three months ended December 31, 2020, 1,514,829 shares were sold pursuant to the Offering

for gross proceeds of $ 8,782,017 (net proceeds of $ 8,518,557 after deducting offering expenses).

At December 31, 2020, an amount

of $ 33,718,084 (September 30, 2020:

$ 42,500,100 ) remained registered under the Company’s effective shelf registration

statement and available to be offered and sold in the Offering.

5 Commitments

the three months ended December 31, 2020, the Company incurred office lease expense of $ 68,387 (2019:

At March 31, 2021, no amount remained

available under the 2019 Purchase Agreement (September 30, 2020:

$24,111,198).

Sales Agreement

The Company entered into a Controlled

Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the “Sales Agreement”) with

Cantor Fitzgerald & Co.

and SVB Leerink LLC (together the “Sales Agents”), pursuant to which the Company may offer

and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents (the “Offering”).

Upon delivery of a placement notice based

on the Company’s instructions and subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the Shares

by methods deemed to be an “at the market offering”

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 the prior written consent of the Company.

The Company is not obligated to make any sales of Shares under the Sales Agreement.

The Company or Sales Agents may suspend or terminate the offering of Shares upon notice to the other party, subject to certain conditions.

The Sales Agents will act as agent on a commercially reasonable efforts basis consistent with their normal trading and sales practices

and applicable state and federal law, rules and regulations and the rules of Nasdaq.

The Company has

agreed to pay the Sales Agents commissions for their services of up to 3.0% of the gross proceeds from the sale of the Shares pursuant

to the Sales Agreement.

The Company also agreed to provide the Sales Agents with customary indemnification and contribution rights.

the six months ended March 31, 2021, 3,552,313 shares were sold pursuant to the Offering for gross proceeds of $37,823,241 (net proceeds

of $36,688,544 after deducting offering expenses).

Note 5 Commitments and Contingencies

three and six months ended March 31, 2021, the Company incurred office lease expense of $29,903 and $98,290, respectively (2020:

and $110,915, respectively).

b) Litigation

Company is subject to claims and legal proceedings that arise in the ordinary course of business.

Such matters are inherently

uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that

the resolution of any such matter will not have a material adverse effect upon the Company's consolidated financial statements.

The Company does not believe that any of such pending claims and legal proceedings will have a material adverse effect on its

consolidated financial statements.

5 Commitments – (Continued)

Purchase Warrants

summary of the status of the Company’s outstanding share purchase warrants is presented below:

Schedule of exercisable share purchase warrants outstanding

September 30, 2019

Balance, September

30, 2020 and December 31, 2020

is subject to claims and legal proceedings that arise in the ordinary course of business.

Such matters are inherently uncertain, and there

can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter

will not have a material adverse effect upon the Company’s consolidated financial statements.

The Company does not believe that

any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.

c) Share Purchase Warrants

A summary of the status of the Company’s

outstanding share purchase warrants is presented below:

Number of Shares

Weighted Average Exercise Price ($)

Balance, September 30, 2019

30, 2020 And December 31, 2020

December 31, 2020, the Company had share purchase warrants outstanding as follows:

Schedule of share purchase warrants outstanding

Balance, September 30, 2020 and March 31, 2021

At March 31, 2021,

the Company had share purchase warrants outstanding as follows:

Exercise Price

June 30, 2021

d) Stock–based

Compensation Plan

Note 5 Commitments –

d) Stock–based Compensation Plan

2015 Stock Option Plan

September 18, 2015, the Company’s board of directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”),

which provided for the grant of stock options and restricted stock awards to directors, officers, employees and consultants of

maximum number of our common shares reserved for issue under the plan was 6,050,553 shares, subject to adjustment in the event

of a change of the Company’s capitalization.

At December 31, 2020, 146,371 (September 30, 2020:

146,371 ) options remain

available for issue under the 2015 Plan.

5 Commitments – (Continued)

d) Stock-based

Compensation Plan – (Continued)

On September 18, 2015, the Company’s

board of directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided for the grant of stock options

and restricted stock awards to directors, officers, employees and consultants of the Company.

The maximum number of our common shares reserved

for issue under the plan was 6,050,553 shares, subject to adjustment in the event of a change of the Company’s capitalization.

March 31, 2021, 146,371 (September 30, 2020:

146,371) options remain available for issue under the 2015 Plan.

2019 Stock Option Plan

January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant

of stock options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company.

the terms of the 2019 Plan, 6,000,000 additional shares of Common Stock are available for issuance under the 2019 Plan, in addition

to the shares available under the 2015 Plan.

Any awards outstanding under the 2015 Plan or the Company’s 2007 Stock Option

Plan (the “2007 Plan”) will remain subject to and be paid under the 2015 Plan or the 2007 Plan, respectively, and

any shares subject to outstanding awards under the 2015 Plan or the 2007 Plan that subsequently cease to be subject to such awards

(other than by reason of settlement of the awards in shares) will automatically become available for issuance under the 2019 Plan.

2019 Plan provides that it may be administered by the Board, or the Board may delegate such responsibility to a committee.

exercise price will be determined by the board of directors at the time of grant shall be at least equal to the fair market

value on such date.

If the grantee is a 10% stockholder on the grant date, then the exercise price shall not be less than

110% of fair market value of the Company’s shares of common stock on the grant date.

Stock options may be

granted under the 2019 Plan for an exercise period of up to ten 10 years from the date of grant of the option or such lesser

periods as may be determined by the board, subject to earlier termination in accordance with the terms of the 2019 Plan.

December 31, 2020, 1,936,665 (September 30, 2020:

3,161,665 ) options remain available for issue under the 2019

summary of the status of Company’s outstanding stock purchase options is presented below:

Schedule of outstanding stock purchase options

Average Exercise Price ($)

Fair Value ($)

September 30, 2019

On January 15, 2019, the Board approved the

2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock options and restricted stock awards to

directors, officers, employees, consultants and advisors of the Company.

Under the terms of the 2019 Plan, 6,000,000 additional shares

of Common Stock are available for issuance under the 2019 Plan, in addition to the shares available under the 2015 Plan.

Any awards outstanding

under the 2015 Plan or the Company’s 2007 Stock Option Plan (the “2007 Plan”) will remain subject to and be paid under

the 2015 Plan or the 2007 Plan, respectively, and any shares subject to outstanding awards under the 2015 Plan or the 2007 Plan that subsequently

cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for

issuance under the 2019 Plan.

The 2019 Plan provides that it may be administered

by the Board, or the Board may delegate such responsibility to a committee.

The exercise price will be determined by the board of directors

at the time of grant shall be at least equal to the fair market value on such date.

If the grantee is a 10% stockholder on the grant date,

then the exercise price shall not be less than 110% of fair market value of the Company’s shares of common stock on the grant date.

Stock options may be granted under the 2019 Plan for an exercise period of up to ten years from the date of grant of the option or such

lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the 2019 Plan.

31, 2021, 1,856,665 (September 30, 2020:

December 31, 2020

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market

price of the Company’s stock for the options that were in-the-money at December 31, 2020.

5 Commitments – (Continued)

d) Stock-based

Compensation Plan – (Continued)

the three months ended December 31, 2020, the Company recognized stock-based compensation expense of $ 939,314 (2019:

$ 1,264,424 )

in connection with the issuance and vesting of stock options and warrants in exchange for services.

These amounts have been

included in general and administrative expenses and research and development expenses on the Company’s statement of

operations as follows:

Schedule of general and administrative expenses and research and development expenses

and administrative

and development

share based compensation

amount of approximately $ 8,185,000 in stock-based compensation is expected to be recorded over the remaining term of such

options through fiscal 2023.

fair value of each option award granted during the three months ended December 31, 2020 and 2019 is estimated on the date of grant

using the Black Scholes option pricing model based on the following weighted average assumptions:

Schedule of weighted average assumptions for fair value of each option award

interest rate

Expected life of options

3,161,665) options remain available for issue under the 2019 Plan.

Note 5 Commitments –

d) Stock-based Compensation Plan –

A summary of the status of Company’s

outstanding stock purchase options is presented below:

Number of Shares

Weighted Average Exercise Price ($)

Weighted Average Grant Date Fair Value ($)

Aggregate intrinsic value ($)

Outstanding, September 30, 2019

Outstanding, September 30, 2020

Outstanding, March 31, 2021

Exercisable, March 31, 2021

The aggregate intrinsic value is calculated

as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the

options that were in-the-money at March 31, 2021.

During the three and six months ended March

31, 2021, the Company recognized stock-based compensation expense of $1,846,156 and $2,785,470, respectively (2020:

$1,700,753 and $2,965,177,

respectively) in connection with the issuance and vesting of stock options and warrants in exchange for services.

These amounts have

been included in general and administrative expenses and research and development expenses on the Company’s statements of operations

Three months ended March 31,

Six months ended March 31,

General and administrative

Research and development

Total share based compensation

An amount of approximately $7,091,142 in stock-based

compensation is expected to be recorded over the remaining term of such options through fiscal 2024.

The fair value of each option

award granted during the six months ended March 31, 2021 and 2020 is estimated on the date of grant using the Black Scholes option pricing

model based on the following weighted average assumptions:

Risk-free interest rate

Expected life of options (years)

Annualized volatility

Dividend rate

6 Subsequent Events

Subsequent to December 31,

a) the Company received $ 497,931 of a $ 995,862 research grant awarded

by the Michael J.

Fox Foundation for Parkinson's Research.

The grant will be used to fund a clinical trial in the Company's lead

compound, ANAVEX ® 2-73 for the treatment of Parkinson's disease.

b) the Company issued 683,279 shares

of common stock under the 2019 Purchase Agreement, including 661,708 shares of common stock for an aggregate purchase price of

$ 6,649,782 and 21,571 commitment shares.

c) an aggregate of 1,841,616 shares were sold under the Sales Agreement

for gross proceeds of $ 25,893,861 .

Management’s

Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes

forward-looking statements.

All statements other than statements of historical facts contained in this Quarterly Report on Form

10-Q, including statements regarding our anticipated future clinical and regulatory milestone events, future financial position,

business strategy and plans and objectives of management for future operations, are forward-looking statements.

The words “believe,”

“may,”

“estimate,”

“continue,”

“anticipate,”

“intend,”

“expect”

“should,”

“forecast,”

“could,”

“suggest,”

“plan”

and similar expressions,

as they relate to us, are intended to identify forward-looking statements.

Such forward-looking statements include, without limitation,

statements regarding:

volatility in our stock and in the markets

our ability to successfully conduct clinical

and preclinical trials for our product candidates;

our ability to raise additional capital

on favorable terms and the impact of such activities on our stockholders and stock price;

the impact of the COVID-19 outbreak and

its effect on us;

our ability to generate any revenue or

to continue as a going concern;

our ability to execute our research and

development plan on time and on budget;

our products ability to demonstrate efficacy

or an acceptable safety profile of our product candidates;

our ability to obtain the support of qualified

scientific collaborators;

our ability, whether alone or with commercial

partners, to successfully commercialize any of our product candidates that may be approved for sale;

our ability to identify and obtain additional

product candidates;

our reliance on third parties in non-clinical

and clinical studies;

our ability to defend against product liability

our ability to safeguard against security

our ability to obtain and maintain sufficient

intellectual property protection for our product candidates;

our ability to comply with our intellectual

property licensing agreements;

our ability to defend against claims of

intellectual property infringement;

our ability to comply with the maintenance

requirements of the government patent agencies;

our ability to protect our intellectual

property rights throughout the world;

the anticipated start dates, durations

and completion dates of our ongoing and future clinical studies;

the anticipated designs of our future clinical

the impact of fast track designation on

receipt of actual FDA approval;

our anticipated future regulatory submissions

and our ability to receive regulatory approvals to develop and market our product candidates, including any orphan drug or fast

track designations;

our anticipated future cash position.

We have based these forward-looking statements

largely on our current expectations and projections about future events, including the responses we expect from the U.S.

Drug Administration, (“FDA”), and other regulatory authorities and financial trends that we believe may affect our

financial condition, results of operations, business strategy, preclinical and clinical trials, and financial needs.

These forward-looking

statements are subject to a number of risks, uncertainties and assumptions including without limitation the risks described in

“Risk Factors”

in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission

on December 28, 2020.

These risks are not exhaustive.

Other sections of this Quarterly Report on Form 10-Q include additional factors

which could adversely impact our business and financial performance.

Moreover, we operate in a very competitive and rapidly changing

New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor

can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause

actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking

statements as predictions of future events.

We cannot assure you that the events and circumstances reflected in the forward-looking

statements will be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

Except as required by applicable laws including the securities laws of the United States, we assume no obligation to update or

supplement forward-looking statements.

As used in this Quarterly Report on Form 10-Q,

the terms “we,”

“us,”

“our,”

and “Anavex”

mean Anavex Life Sciences Corp., unless

the context clearly requires otherwise.

Our Current Business

Anavex Life Sciences Corp.

is a clinical stage

biopharmaceutical company engaged in the development of differentiated therapeutics by applying precision medicine to central nervous

system (“CNS”) diseases with high unmet need.

We analyze genomic data from clinical studies to identify biomarkers,

which we use to select patients that will receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental

Our lead compound, ANAVEX ®

is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases,

including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked

gene, methyl-CpG-binding protein 2 (“MECP2”).

We currently have two core programs and two

seed programs.

Our core programs are at various stages of clinical and preclinical development, in neurodegenerative and neurodevelopmental

The following table summarizes key information about our programs:

Anavex has a portfolio of compounds varying

in sigma-1 receptor (S1R) binding activities.

The SIGMAR1 gene encodes the S1R protein, which is an intracellular chaperone protein

with important roles in cellular communication.

S1R is also involved in transcriptional regulation at the nuclear envelope and

restores homeostasis and stimulates recovery of cell function when activated.

In order to validate the ability of our compounds

to activate quantitatively the S1R, we performed, in collaboration with Stanford University, a quantitative Positron Emission Tomography

(PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ®

2-73 target engagement or receptor occupancy

(RO) with S1R in the brain.

Cellular Homeostasis

Many diseases are possibly directly caused

by chronic homeostatic imbalances or cellular stress of brain cells.

In pediatric diseases like 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.

Specifically, defects in homeostasis of protein or ribonucleic acid (“RNA”)

lead to the death of neurons and dysfunction of the nervous system.

The spreading of protein aggregates resulting in a proteinopathy,

a characteristic finding in Alzheimer’s and Parkinson’s diseases that results from disorders of protein synthesis,

trafficking, folding, processing or degradation in cells.

The clearance of macromolecules in the brain is particularly susceptible

to imbalances that result in aggregation and degeneration in nerve cells.

For example, Alzheimer’s disease pathology is characterized

by the presence of amyloid plaques, neurofibrillary tangles, which are aggregates of hyperphosphorylated Tau protein that are a

marker of other diseases known as tauopathies as well as inflammation of microglia.

With the SIGMAR1 activation through SIGMAR1

agonists like ANAVEX ®

2-73, our approach is to restore cellular balance, i.e.

Therapies that correct

defects in cellular homeostasis might have the potential to halt or delay neurodevelopmental and neurodegenerative disease progression.

2-73-specific Biomarkers

A full genomic analysis of Alzheimer’s

disease (AD) patients treated with ANAVEX ®

2-73 resulted in the identification of actionable genetic variants.

significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ®

2-73 and COMT, a gene involved

in memory function, on the drug response level was identified, leading to an early ANAVEX ®

2-73-specific biomarker

It is expected that excluding patients with these two identified biomarker variants (approximately 10%-20% of

the population) in prospective studies would identify approximately 80%-90% patients that would display clinically significant

improved functional and cognitive scores.

The consistency between the identified DNA

and RNA data related to ANAVEX ®

2-73, which are considered independent of AD pathology, as well as multiple endpoints

and time-points, provides support for precision medicine clinical development of ANAVEX ®

2-73 by using genetic biomarkers

identified within the study population itself to target patients who are most likely to respond to ANAVEX ®

2-73 treatment

in AD as well as indications like Parkinson’s disease dementia (PDD) or Rett syndrome (RTT) in which ANAVEX ®

is currently studied.

Clinical Studies Overview

Alzheimer’s Disease

In November 2016, we completed a Phase 2a clinical

trial, consisting of PART A and PART B, which lasted a total of 57 weeks, for ANAVEX ®

2-73 in mild-to-moderate Alzheimer’s

This open-label randomized trial met both primary and secondary endpoints and was designed to assess the safety and exploratory

efficacy of ANAVEX ®

2-73 in 32 patients.

2-73 targets sigma-1 and muscarinic receptors, which

have been shown in preclinical studies to reduce stress levels in the brain believed to restore cellular homeostasis and to reverse

the pathological hallmarks observed in Alzheimer’s disease.

The Phase 2a trial demonstrated positive pharmacokinetic (PK)

and pharmacodynamic (PD) data, which established a concentration-effect relationship between ANAVEX ®

2-73 and study

measurements.

These measures obtained from all patients who participated in the entire 57 weeks include exploratory cognitive and

functional scores as well as biomarker signals of brain activity.

Additionally, the study appears to show that ANAVEX ®

activity is enhanced by its active metabolite (ANAVEX19-144), which also targets the sigma-1 receptor and has a half-life approximately

twice as long as the parent molecule.

Two consecutive trial extensions for the Phase

2a trial have allowed participants who completed the 52-week PART B of the study to continue taking ANAVEX ®

providing an opportunity to gather extended safety data for a cumulative time period of five years.

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 (TGA) compassionate use Special Access Scheme.

A larger Phase 2b/3 double-blind, placebo-controlled

study of ANAVEX ®

2-73 in Alzheimer’s disease commenced in August 2018.

The Phase 2b/3 study will enroll approximately

450 patients for 48 weeks, randomized 1:1:1 to two different ANAVEX ®

2-73 doses or placebo.

The trial commenced in

and additional regions have been added in the United Kingdom, The Netherlands, Germany and Canada.

The ANAVEX ®

Phase 2b/3 study design incorporates genomic precision medicine biomarkers identified in the ANAVEX ®

2-73 Phase 2a

Primary and secondary endpoints will assess safety and both cognitive and functional efficacy, measured through Alzheimer’s

Disease Assessment Scale –

Cognition (ADAS-Cog), ADCS-ADL and Clinical Dementia Rating –

Sum of Boxes for cognition

and function (CDR-SB).

In October 2019,

we initiated a long-term open label extension study of ANAVEX ®

2-73, entitled the ATTENTION-AD study, for patients

who have completed the 48-week Phase 2b/3 placebo-controlled trial referenced above.

This study is expected to last two years and

will give patients the opportunity to continue their treatment.

Rett Syndrome

In February 2016, we presented positive preclinical

data for ANAVEX ®

2-73 in Rett syndrome, a rare neurodevelopmental disease.

The study was funded by the International

Rett Syndrome Foundation (“Rettsyndrome.org”).

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 ®

the treatment of Rett syndrome.

This award was received in quarterly instalments which commenced during fiscal 2018.

In March 2019, we commenced the first Phase

2 clinical trial in a planned Rett syndrome program of ANAVEX ®

2-73 for the treatment of Rett syndrome.

are being conducted in a range of patient age demographics and geographic regions, utilizing a convenient oral liquid once-daily

formulation of ANAVEX ®

The first Phase 2 study, which took place in

the United States, was completed in December 2020.

This trial was a randomized double-blind, placebo-controlled safety, tolerability,

pharmacokinetic and efficacy study of oral liquid ANAVEX ®

2-73 formulation in 25 adult female patients with Rett

syndrome over a 7-week treatment period including ANAVEX ®

2-73-specific genomic precision medicine biomarkers.

primary endpoint of the trial was safety.

The dosing of 5 mg ANAVEX ®

2-73 was well-tolerated and demonstrated dose-proportional

PK (pharmacokinetics).

All secondary efficacy endpoints of the trial showed statistically significant and clinically meaningful,

drug exposure-dependent response in the Rett Syndrome Behaviour Questionnaire (RSBQ) Total scores, when compared to placebo, in

the ITT cohort (all participants, p = 0.048).

66.7% of ANAVEX ®

2-73 treated subjects showed a statistically significant

improvement in drug exposure-dependent RSBQ response as compared to 10% of the subjects on placebo in the ITT cohort (all participants,

2-73 treatment resulted in a sustained improvement in Clinical Global Impression Improvement

(CGI-I) scores throughout the 7-week study, when compared to placebo in the ITT cohort (all participants, p = 0.014).

2-73 treated subjects showed a statistically significant CGI-I response, defined as sustained improvement

to treatment, as compared to 40% of the subjects on placebo in the ITT cohort (all participants, p = 0.014).

Consistent with previous

2-73 clinical trials, patients carrying the common form of the SIGMAR1 gene treated with ANAVEX ®

experienced stronger improvements in the prespecified efficacy endpoints.

The second Phase 2 study of ANAVEX ®

for the treatment of Rett syndrome, called the AVATAR study, commenced in June 2019.

This study is taking place in Australia and

the United Kingdom using a higher dose than the U.S.

based Phase 2 study for Rett syndrome.

The study will evaluate the safety

and efficacy of ANAVEX ®

2-73 in approximately 33 patients over a 7-week treatment period including ANAVEX ®

specific precision medicine biomarkers.

All patients who participate in the study will be eligible to receive ANAVEX ®

under a voluntary open label extension protocol.

In July 2020, we commenced the third study

of ANAVEX ®

2-73 for the treatment of Rett syndrome, called the EXCELLENCE study.

This Phase 2/3 study in pediatric

patients with Rett syndrome will evaluate the safety and efficacy of ANAVEX ®

2-73 in at least 69 pediatric patients,

aged 5 to 18, over a 12-week treatment period incorporating ANAVEX ®

2-73 specific precision medicine biomarkers.

All patients who participate in the study will be eligible to receive ANAVEX ®

2-73 under a voluntary open label extension

Parkinson’s Disease

In September 2016, we presented positive preclinical

data for ANAVEX ®

2-73 in an animal model of Parkinson’s disease, which demonstrated significant improvements

on behavioral, histopathological, and neuroinflammatory endpoints.

The study was funded by the Michael J.

Fox Foundation.

data announced in October 2017 indicates that ANAVEX ®

2-73 induces robust neurorestoration in experimental parkinsonism.

The encouraging results we have gathered in this model, coupled with the favorable profile of this compound in the Alzheimer’s

disease trial, support the notion that ANAVEX ®

2-73 is a promising clinical candidate drug for Parkinson’s

disease dementia.

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

(PDD), to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.

study 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 PDD study design incorporated genomic precision medicine biomarkers

identified in the ANAVEX ®

2-73 Phase 2a Alzheimer’s disease study.

Within this study ANAVEX ®

was safe and well tolerated in oral doses up to 50mg once daily.

The results show clinically meaningful, dose-dependent, and statistically

significant improvements in the Cognitive Drug Research (CDR) computerized assessment system analysis.

The study confirmed the

precision medicine approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ®

In August 2020, we announced a financial commitment

by Shake It Up Australia Foundation for Parkinson’s Research to fund up to 50% of the costs of an Australian clinical study

to develop ANAVEX ®

2-73 for the disease modifying treatment of Parkinson’s disease.

The financial commitment

would be made through private placement purchases of our common stock at 200% of the fair market value on the purchase date and

will be contingent upon the completion of certain clinical trial milestones relating to the proposed clinical trial.

clinical trial will use a convenient, once-daily oral ANAVEX ®

2-73 formulation to confirm the potential disease modifying

features of ANAVEX ®

2-73 in an animal model of Parkinson’s disease.

Safety and efficacy will be investigated

in an appropriately powered placebo-controlled clinical study of Parkinson’s disease patients over at least 48-weeks including

2-73-specific precision medicine biomarkers.

In January 2021, we announced we were awarded

a research grant of $1.0 million from The Michael J.

Fox Foundation

for Parkinson’s Research (MJFF) to develop ANAVEX ®

2-73 for the treatment of Parkinson’s

The award will explore utilization of PET imaging biomarkers to enable measurement of target engagement and pathway activation

of the sigma-1 receptor (SIGMAR1) with clinically relevant doses in people with Parkinson’s disease.

Frontotemporal Dementia

In July 2020, we commenced the First-in-Human

Phase 1 clinical trial of ANAVEX ®

3-71, which was previously granted orphan drug designation for the treatment of

Frontotemporal Dementia (FTD) by the FDA.

3-71 is an orally administered small molecule targeting sigma-1

and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.

In preclinical studies, ANAVEX ®

demonstrated disease-modifying activity against the major hallmarks of Alzheimer’s disease in transgenic (3xTg-AD) mice,

including cognitive deficits, amyloid and tau pathologies, as well as beneficial effects on mitochondrial dysfunction and neuroinflammation.

1 clinical trial will be a prospective double-blind, randomized, placebo-controlled study.

A total of at least 36 healthy male

and female subjects will be included.

Single escalating doses of ANAVEX ®

3-71 will be administered in order to evaluate

the safety, tolerability, and pharmacokinetics (PK) of ANAVEX ®

3-71 and the effects of food and gender on its PK

in healthy volunteers.

This study is expected to be followed by longer duration dosing including patients with FTD or other dementia

indications with unmet medical need, incorporating exploratory efficacy and disease biomarker measures .

Our research and development pipeline includes

2-73 currently in three different clinical study indications, and several other compounds in different stages

of clinical and pre-clinical study.

Our proprietary SIGMACEPTOR™

Platform produced small molecule drug candidates with unique modes of action, based on our understanding of sigma receptors.

receptors may be targets for therapeutics to combat many human diseases, both of neurodegenerative nature, including Alzheimer’s

disease, as well as of neurodevelopmental nature, like Rett syndrome.

When bound by the appropriate ligands, sigma receptors influence

the functioning of multiple biochemical signals that are involved in the pathogenesis (origin or development) of disease.

viruses including SARS-CoV-2 (COVID-19) induce cellular stress by intrinsic mitochondrial apoptosis and other related cellular

processes, in order to ensure survival and replication.

Hence, it is possible that S1R could play a role in modulating the cellular

response to viral infection and ameliorate pathogenesis.

Compounds that have been subjects of our research

include the following:

2-73 (blarcamesine)

2-73 may offer a disease-modifying

approach in neurodegenerative and neurodevelopmental diseases by activation of sigma-1 receptors.

In Rett syndrome, administration of ANAVEX ®

resulted in both significant and dose related improvements in an array of behavioral paradigms in the MECP2 HET Rett syndrome disease

In addition, in a further experiment sponsored by Rettsyndrome.org, ANAVEX ®

2-73 was evaluated in automatic

visual response and respiration tests in 7-month old mice, an age at which advanced pathology is evident.

Vehicle-treated MECP2

mice demonstrated fewer automatic visual responses than wild-type mice.

Treatment with ANAVEX ®

2-73 for four weeks

significantly increased the automatic visual response in the MECP2 Rett syndrome disease mouse.

Additionally, chronic oral dosing

daily for 6.5 weeks of ANAVEX ®

2-73 starting at ~5.5 weeks of age was conducted in the MECP2 HET Rett syndrome disease

mouse model assessed the different aspects of muscular coordination, balance, motor learning and muscular strengths, some of the

core deficits observed in Rett syndrome.

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 March 2019, we commenced the first Phase

2 clinical trial in a planned Rett syndrome program of ANAVEX ®

2-73 for the treatment of Rett syndrome.

which took place in the United States, was completed in December 2020, however two other clinical trials in Rett syndrome, the

AVATAR study and the EXCELLENCE study, are still underway.

The studies are being conducted in a range of patient age demographics

and geographic regions, as more fully described above under Clinical Studies Overview –

Rett Syndrome .

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.

November 2019, the FDA granted to ANAVEX ®

2-73 the Rare Pediatric Disease (RPD) designation for the treatment of

Rett syndrome.

The RPD designation provides priority review by the FDA to encourage the development of treatments for rare pediatric

Further, in February 2020, the FDA granted

Fast Track designation for the ANAVEX ®

2-73 clinical development program for the treatment of Rett syndrome.

FDA Fast Track program is designed to facilitate and expedite the development and review of new drugs to address unmet medical

needs in the treatment of serious and life-threatening conditions.

For Parkinson’s disease, data demonstrates

significant improvements and restoration of function in a disease modifying animal model of Parkinson’s disease.

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 (PDD), to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.

The Phase 2 study enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ®

doses, 30mg and 50mg, or placebo.

The ANAVEX ®

2-73 Phase 2 PDD study design incorporated genomic precision medicine

biomarkers identified in the ANAVEX ®

2-73 Phase 2a Alzheimer’s disease study.

The study found that ANAVEX ®

was safe and well tolerated in oral doses up to 50mg once daily.

The results show clinically meaningful, dose-dependent, and statistically

significant improvements in the Cognitive Drug Research (CDR) computerized assessment system analysis.

We anticipate conducting

further clinical trials of ANAVEX ®

2-73 in Parkinson’s disease dementia after submitting the results of the

study to the FDA to obtain regulatory guidance.

In Alzheimer’s disease (AD) animal models,

2-73 has shown pharmacological, histological and behavioral evidence as a potential neuroprotective, anti-amnesic,

anti-convulsive and anti-depressive therapeutic agent, due to its potent affinity to sigma-1 receptors and moderate affinities

to M1-4 type muscarinic receptors.

In addition, ANAVEX ®

2-73 has shown a potential dual mechanism which may impact

amyloid, tau pathology and inflammation.

In a transgenic AD animal model Tg2576, ANAVEX ®

2-73 induced a statistically

significant neuroprotective effect against the development of oxidative stress in the mouse brain, as well as significantly increased

the expression of functional and synaptic plasticity markers that is apparently amyloid-beta independent.

It also statistically

alleviated the learning and memory deficits developed over time in the animals, regardless of sex, both in terms of spatial working

memory and long-term spatial reference memory.

Based on the results of pre-clinical testing,

we initiated and completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX ®

In this Phase 1

SAD trial, the maximum tolerated single dose was defined per protocol as 55-60 mg.

This dose is above the equivalent dose shown

to have positive effects in mouse models of AD.

There were no significant changes in laboratory or electrocardiogram (ECG) parameters.

2-73 was well tolerated below the 55-60 mg dose with only mild adverse events in some subjects.

adverse events at doses above the maximum tolerated single dose included headache and dizziness, which were moderate in severity

and reversible.

These side effects are often seen with drugs that target CNS conditions, including AD.

In December 2014, a Phase 2a clinical trial

was initiated 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

2-73 is an orally available drug candidate that restores cellular homeostasis by targeting sigma-1

and muscarinic receptors.

Preclinical studies demonstrated its potential to halt and/or reverse the course of Alzheimer’s.

The Phase 2a study met both primary and secondary objectives of the study.

In July 2018, we presented

the results of a genomic DNA and RNA evaluation of the participants in the Phase 2a study.

More than 33,000 genes were analyzed

using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA & RNA data in patients

exposed to ANAVEX ®

The analysis identified genetic variants that impacted response to ANAVEX ®

among them variants related to the Sigma-1 receptor (SIGMAR1), the target for ANAVEX ®

Results showed that study

participants with the common SIGMAR1 wild type gene variant, which is about 80 percent of the population worldwide, demonstrated

improved cognitive (MMSE) and the functional (ADCS-ADL) scores.

The results from this evaluation have been used to establish a

precision medicine approach in subsequent clinical trials, since these signatures can now be applied to neurological indications

tested in clinical studies with ANAVEX ®

2-73 including Alzheimer’s disease, Parkinson’s disease dementia

and Rett syndrome.

data presented met prerequisite information in order to progress into a Phase 2b/3 placebo-controlled study.

On July 2, 2018, the

Human Research Ethics Committee in Australia approved the initiation of our Phase 2b/3, double-blind, randomized, placebo-controlled

48-week safety and efficacy trial of ANAVEX ®

2-73 for the treatment of early Alzheimer’s disease.

trial sites in Canada, the United Kingdom, the Netherlands and Germany were also added.

This Phase 2b/3 study design incorporates

inclusion of genomic precision medicine biomarkers identified in the ANAVEX ®

2-73 Phase 2a study.

The Phase 2b/3

study, which is expected to enroll approximately 450 patients, randomized 1:1:1 to either two different ANAVEX ®

doses or placebo, commenced in October 2018.

Preclinical data also validates ANAVEX ®

as a prospective 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).

2-73 demonstrated significant improvements in all of these

indications in the respective preclinical animal models.

In a study sponsored by the Foundation for

Angelman Syndrome, ANAVEX ®

2-73 was assessed in a mouse model for the development of audiogenic seizures.

indicated that ANAVEX ®

2-73 administration significantly reduced audiogenic-induced seizures.

In a study sponsored

by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX ®

2-73 restored hippocampal

brain-derived neurotrophic factor (BDNF) expression to normal levels.

BDNF under-expression has been observed in many neurodevelopmental

and neurodegenerative pathologies.

BDNF signaling promotes maturation of both excitatory and inhibitory synapses.

normalization of BDNF expression could be a contributing factor for the positive data observed in both neurodevelopmental and neurodegenerative

disorders like Angelman and Fragile X syndromes.

Preclinical data presented also indicates that

2-73 demonstrates 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.

Preclinical data on ANAVEX ®

related to multiple sclerosis indicates that ANAVEX ®

2-73 may promote remyelination in multiple sclerosis disease.

Further, data also demonstrates that ANAVEX ®

2-73 provides 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.

In March 2018, we presented preclinical data

of ANAVEX ®

2-73 in a genetic mouse model of tuberous sclerosis complex (“TSC”).

TSC is a rare genetic

disorder characterized by the growth of numerous benign tumors in many parts of the body with a high incidence of seizures.

new preclinical data demonstrates that treatment with ANAVEX ®

2-73 significantly increases survival and reduces seizures.

3-71 is a clinical drug

candidate with a novel mechanism of action via sigma-1 receptor activation and M1 muscarinic allosteric modulation, which has been

shown to enhance neuroprotection and cognition in Alzheimer’s disease models.

3-71 is a CNS-penetrable

potential disease modifying treatment for cognitive impairments.

It is highly 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.

3-71 indicates extensive therapeutic advantages in Alzheimer’s

and other protein-aggregation-related diseases given its ability to enhance neuroprotection and cognition via sigma-1 receptor

activation and M1 muscarinic allosteric modulation.

A preclinical study examined the response of

3-71 in aged transgenic animal models and showed a significant reduction in the rate of cognitive deficit,

amyloid beta pathology and inflammation with the administration of ANAVEX 3-71.

In April 2016, the FDA granted Orphan Drug Designation

to ANAVEX ®

3-71 for the treatment of Frontotemporal dementia (FTD).

During pathological conditions ANAVEX ®

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.

Additional preclinical data presented also indicates that in addition to reducing oxidative stress, ANAVEX ®

demonstrates protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed

to play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.

In July 2020, we commenced the first Phase

1 clinical trial of ANAVEX ®

3-71, with focus on the treatment of Frontotemporal Dementia (FTD) and other

dementia indications with unmet medical need .

The study is more fully described above under Clinical Studies Overview

Frontotemporal Dementia .

1-41 is a sigma-1 receptor

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.

In addition, in animal models, ANAVEX ®

1-41 prevented the expression of caspase-3, an enzyme that plays a key role

in apoptosis (programmed cell death) and loss of cells in the hippocampus, the part of the brain that regulates learning, emotion

These activities involve both muscarinic and sigma-1 receptor systems through a novel mechanism of action.

Preclinical data presented also indicates that

1-41 demonstrates 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.

1066, a mixed sigma-1/sigma-2

ligand is designed for the potential treatment of neuropathic and visceral pain.

1066 was tested in two preclinical

models of neuropathic and visceral pain that have been extensively validated in rats.

In the chronic constriction injury model

of neuropathic pain, a single oral administration of ANAVEX ®

1066 dose-dependently restored the nociceptive threshold

in the affected paw to normal levels while leaving the contralateral healthy paw unchanged.

Efficacy was rapid and remained significant

for two hours.

In a model of visceral pain, chronic colonic hypersensitivity was induced by injection of an inflammatory agent

directly into the colon and a single oral administration of ANAVEX ®

1066 returned the nociceptive threshold to control

levels in a dose-dependent manner.

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.

1037 is designed for

the treatment of prostate and pancreatic cancer.

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.

advanced pre-clinical studies, this compound revealed antitumor potential.

It has also been shown to selectively kill human cancer

cells without affecting normal/healthy cells and also to significantly suppress tumor growth in immune-deficient mice models.

publications highlight the possibility that these ligands may stop tumor growth and induce selective cell death in various tumor

Sigma receptors are highly expressed in different tumor cell types.

Binding by appropriate sigma-1 and/or sigma-2 ligands

can induce selective apoptosis.

In addition, through tumor cell membrane reorganization and interactions with ion channels, our

drug candidates may play an important role in inhibiting the processes of metastasis (spreading of cancer cells from the original

site to other parts of the body), angiogenesis (the formation of new blood vessels) and tumor cell proliferation.

Our compounds are in the clinical and pre-clinical

testing stages of development, and there is no guarantee that the activity demonstrated in pre-clinical models will be shown in

human testing.

We continue to identify and initiate discussions

with potential strategic and commercial partners to most effectively advance our programs and realize maximum shareholder value.

Further, we may acquire or develop new intellectual property and assign, license, or otherwise transfer our intellectual property

to further our goals.

Our Target Indications

We have developed compounds with potential

application to two broad categories and several specific indications.

Central Nervous System Diseases

Alzheimer’s disease –

In 2020, an estimated 5.8 million

Americans were suffering from Alzheimer’s disease.

The Alzheimer’s Association ®

estimates that by 2050,

this number will rise to nearly 14 million Americans.

Medications on the market today treat only the symptoms of Alzheimer’s

disease and do not have the ability to stop its onset or its progression.

There is an urgent and unmet need for both a disease

modifying cure for Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease –

Parkinson’s disease is a progressive

disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.

It is associated with degeneration

of the basal ganglia of the brain and a deficiency of the neurotransmitter dopamine.

Parkinson’s disease afflicts more than

10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease market is expected to expand

to $3.2 billion by 2021, according to business intelligence provider GBI Research.

Rett syndrome –

Rett syndrome is a rare X-linked genetic neurological

and developmental disorder that affects the way the brain develops, including protein transcription, which is altered and as a

result leads to severe disruptions in neuronal homeostasis.

It is considered a rare, progressive neurodevelopmental disorder and

is caused by a single mutation in the MECP2 gene.

Because males have a different chromosome combination from females, boys who

have the genetic MECP2 mutation are affected in devastating ways.

Most of them die before birth or in early infancy.

who survive infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect of the child’s life;

mental retardation, their ability to speak, walk and eat, sleeping problems, seizures and even the ability to breathe easily.

Rett syndrome affects approximately 1 in every 10,000-15,000 females.

Depression –

Depression is a major cause of morbidity worldwide

according to the World Health Organization.

Pharmaceutical treatment for depression is dominated by blockbuster brands, with the

leading nine brands historically accounting for approximately 75% of total sales.

However, the dominance of the leading brands

is waning, largely due to the effects of patent expiration and generic competition.

Epilepsy –

Epilepsy is a common chronic neurological disorder

characterized by recurrent unprovoked seizures.

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

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.

Because epilepsy afflicts sufferers in different ways, there is a need for drugs

used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Neuropathic Pain –

We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of the body.

Neuralgia is more difficult to treat than some other types of pain because it does not respond well to normal pain medications.

Special medications have become more specific to neuralgia and typically fall under the category of membrane stabilizing drugs or antidepressants.

Malignant Melanoma –

Predominantly a skin cancer, malignant melanoma

can also occur in melanocytes found in the bowel and the eye.

Malignant melanoma accounts for 75% of all deaths associated with

The treatment includes surgical removal of the tumor, adjuvant treatment, chemo and immunotherapy, or radiation therapy.

According to IMS Health the worldwide malignant melanoma market is expected to grow to $4.4 billion by 2022.

Prostate Cancer –

Specific to men, prostate cancer is a form

of cancer that develops in the prostate, a gland in the male reproductive system.

The cancer cells may metastasize from the prostate

to other parts of the body, particularly the bones and lymph nodes.

Drug therapeutics for prostate cancer are expected to increase

to nearly $13.5 billion in 2024 according to Datamonitor Healthcare.

Pancreatic Cancer –

Pancreatic cancer is a malignant neoplasm

of the pancreas.

In the United States, approximately 55,000 new cases of pancreatic cancer will be diagnosed this year and approximately

44,000 patients will die as a result of their cancer, according to the American Cancer Society.

Sales predictions by GBI Research

forecast that the market for the pharmaceutical treatment of pancreatic cancer in the United States and five largest European

countries will increase to $2.9 billion by 2021.

Patents, Trademarks and Intellectual

We hold ownership or exclusive rights to thirteen

patents, seventeen U.S.

patent applications, and various PCT or ex-U.S.

patent applications relating to our drug candidates,

methods associated therewith, and to our research programs.

We own one issued U.S.

patent entitled “ANAVEX ®

and certain anticholinesterase inhibitors composition and method for neuroprotection”

claims a composition of matter of ANAVEX ®

directed to a novel and synergistic neuroprotective compound combined with donepezil and other cholinesterase inhibitors.

patent is expected to expire in June 2034, absent any patent term extension for regulatory delays.

We own two issued U.S.

each with claims directed to crystalline forms of ANAVEX ®

The first of these two patents claims crystalline

forms of ANAVEX ®

2-73, dosage forms and compositions containing crystalline ANAVEX ®

2-73, and methods

of treatment for Alzheimer’s disease using them.

This patent is expected to expire in July 2036, absent any patent term extension

for regulatory delays.

The second of these two patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ®

and methods of treatment for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2037,

absent any patent term extension for regulatory delays.

We also own two issued U.S.

patents on seizure treatment.

these two patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose anti-epilepsy drug

combined with either:

(i) ANAVEX ®

2-73 and its active metabolite ANAVEX ®

or (ii) ANAVEX ®

The second of these two patents further claims the seizure treatment being co-timely or coordinated administration of anti-epilepsy

drugs and (i) ANAVEX 19-144 ®

or (ii) ANAVEX 19-144 ®

with ANAVEX 2-73 ®

are expected to expire in October 2035, absent any patent term extension for regulatory delays.

We also own two issued U.S.

with claims directed to treating neurodevelopmental disorders.

These patents claim methods for treating a neurodevelopmental disorder

or multiple sclerosis by administering ANAVEX ®

2-73, ANAVEX ®

19-144, and/or ANAVEX ®

(another sigma receptor ligand similar to ANAVEX ®

2-73), or compositions thereof.

Both 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 ®

This patent is expected to expire

in February 2030, absent any patent term extension for regulatory delays.

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 ®

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.

We also own two issued U.S.

patents related

to ANAVEX ®

The first of these two patents claims methods for treating or preventing pain using (+) ANAVEX ®

The second patent claims methods for treating or preventing pain using (-) ANAVEX ®

1066 isomer Both patents

are expected to expire in November 2036, absent any patent term extension for regulatory delays.

For ANAVEX ®

2-73, ANAVEX ®

1-41, and ANAVEX ®

1066, we also have granted or pending applications in Australia, Canada,

China, Europe, Japan, and Hong Kong, and are expected to expire after 2035.

With regard to ANAVEX ®

we own exclusive rights to two issued U.S.

patents with claims respectively directed to the ANAVEX ®

3-71 compound

and methods of treating various diseases including Alzheimer’s with the same.

These patents are expected to expire in April

2030, and January 2030, respectively, absent any patent term extension for regulatory delays.

We also own exclusive rights to related

patents or applications that are granted or pending in Australia, Canada, China, Europe, Japan, Korea, New Zealand, Russia, and

South Africa, and are expected to expire in January 2030.

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.

Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy

including the selective development, protection, and exploitation of our intellectual property rights.

In addition to filings made

with intellectual property authorities, we protect our intellectual property and confidential information by means of carefully

considered processes of communication and the sharing of information, and by the use of confidentiality and non-disclosure agreements

and provisions for the same in contractor’s agreements.

While no agreement offers absolute protection, such agreements provide

some form of recourse in the event of disclosure, or anticipated disclosure.

Our intellectual property position, like that

of many biomedical companies, is uncertain and involves complex legal and technical questions for which important legal principles

are unresolved.

For more information regarding challenges to our existing or future patents, see “Risk Factors”

in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 28, 2020.

Financial Highlights

At March 31, 2021, our cash position

had increased to $75.9 million, from $29.2 million at our fiscal year end of September 30, 2020.

Operating expenses for the second quarter of

fiscal 2021 were $9.0 million, compared to $7.8 million for the comparable quarter in fiscal 2020.

The operating expenses include an

aggregate of $1.8 million, as compared to $1.7 million in the second quarter of fiscal 2020, in non-cash charges related to the issuance

and vesting of stock options.

Our research and development expenses for the second quarter of fiscal 2021 were $6.7 million, compared

to $6.1 million in the comparable period in fiscal 2020.

The increase is attributable to the continued advancement of our ongoing clinical

Net loss for the second quarter of fiscal

2021 was $8.2 million, or $0.12 per share, as compared to $7.2 million, or $0.12 per share in the comparative quarter of fiscal

Results of Operations

are in the development stage and have not earned any revenues since our inception and 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.

and six months ended March 31, 2021 compared to three and six months ended March 31, 2020.

Operating Expenses

Total operating

expenses for the second quarter of fiscal 2021 were $9.0 million, compared to $7.8 million for the comparable quarter of fiscal

Total operating expenses for the first half of fiscal 2021 were $18.4 million compared

to $15.5 million for the same period in fiscal 2020.

This represents an increase of $1.2 million for the three-month period and

$2.9 million for the six-month period.

Research and development

expenses for the second quarter of fiscal 2021 were $6.7 million, compared to $6.1 million for the second quarter of fiscal 2020

and $14.6 million for the six-month period ended March 31, 2021, as compared to $12.4 million for the applicable prior year period.

This increase in both the current quarter and the year-to-date period is attributable to the continued advancement of our ongoing

clinical trials, most notably, the expansion of our Phase 2b/3 Alzheimer’s disease trial internationally, as well

as the international Rett syndrome program.

General and administrative expenses have increased

to $2.2 million for the three months ended March 31, 2021, as compared to $1.7 million for the second quarter of fiscal 2020.

general and administrative expenses increased to $3.7 million for the six-month period ended March 31, 2021, as compared to $3.1

million for the applicable prior year period.

The increase in general and administrative expenses was primarily related to an increase

in professional and consulting fees.

The net amount of other income was $0.8 million

for the three-month period ended March 31, 2021 as compared to $0.5 million for the three-month period ended March 31, 2020 and

$2.4 million for the six-month period as compared to $1.7 million for the comparable six-month period in fiscal 2020.

in other income is attributable to an increase in Australian research and development incentive income in connection with the increase

in eligible clinical activities in Australia over the comparable period.

Foreign exchange gains and losses during the period were related

to the fluctuations in the Australian dollar against the US dollar and its related impact on Incentive and tax receivables during

Liquidity and Capital Resources

Working Capital

March 31, 2021

September 30, 2020

Current Assets

Current Liabilities

Working Capital

At March 31, 2021, we had $75.9 million in cash and cash equivalents, an increase of $46.6 million from September 30, 2020.

the six-month period ended March 31, 2021, we received cash of $61.8 million, net of issuance costs, primarily from the issuance of shares

of common stock under the 2019 Purchase Agreement and through the Sales Agreement, as more fully described elsewhere in this Quarterly

Six months ended March 31,

Net cash flows used in operating activities

$ (15,188,223 )

$ (10,988,051 )

Net cash flows from financing activities

Increase in cash and cash equivalents

Cash flow used in operating activities

Net cash used in operating activities

for the first six months of fiscal 2021 was $15.2 million, compared to $11.0 million during

the comparable period of fiscal 2020.

The principal reason for this increase in net cash used from operating activities in the

current period is due to an increase in research and development expenses and an increase in research and development incentive

income receivable, as compared to the comparable period.

Cash flow provided by financing activities

Cash provided by financing activities for the first

six months in fiscal 2021 was $61.8 million, primarily attributable to cash received from the issuance of common shares at

various market prices under the 2019 Purchase Agreement and the Sales Agreement, net of financing costs.

Cash provided by financing activities

for the first six months in fiscal 2020 was $15.4 million, attributable to cash received from

the issuance of common shares at various market prices under the 2019 Purchase Agreement .

Other Financing

Purchase Agreement

On June 7, 2019, we

entered into a Purchase Agreement (the “2019 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln

Park”), as amended on July 1, 2020, pursuant to which Lincoln Park committed to purchase up to $50,000,000 of our common

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 $50,000,000 aggregate commitment.

During the six months ended March 31, 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 $24,111,198 and 78,213 commitment shares.

March 31, 2021, no shares of our common stock remain available for purchase by Lincoln Park under the 2019 Purchase Agreement.

Controlled Equity Offering Sales Agreement

1, 2020, we entered into an Amended and Restated Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald

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”).

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.

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.

The Sales Agents will act as agents on a commercially reasonable efforts basis consistent with their normal trading and sales practices

and applicable state and federal law, rules and regulations and the rules of Nasdaq.

We have agreed to pay the Sales Agents commissions

for their services of 3.0% of the gross proceeds from the sale of the Shares pursuant to the Sales Agreement.

We have also agreed

to provide the Sales Agents with customary indemnification and contribution rights.

During the six months ended March 31, 2021,

3,552,313 shares were sold pursuant to the Offering for gross proceeds of $37,823,241 (net proceeds of $36,688,544 after deducting

commissions and offering expenses).

Sheet Arrangements

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.

CRITICAL ACCOUNTING POLICIES

We prepare our interim condensed

consolidated financial statements in accordance with accounting principles generally accepted in the United States of America,

and make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, and the related

disclosures of contingent liabilities.

We base our estimates on historical experience and other assumptions that we believe are

reasonable in the circumstances.

Actual results may differ from these estimates.

There have been no significant

changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended September

30, 2020 as filed with the SEC on December 28, 2020.

RECENT ACCOUNTING PRONOUNCEMENTS

Please refer to Note 2 “Recent

Accounting Pronouncements”

in notes to our Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

and Qualitative Disclosures about Market Risks.

Not applicable

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements