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Item 1A. Risk Factors

2022-11-28 compared with 2021-11-24 · 847 added, 289 removed, 579 unchanged (66% of the section changed)

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This may seriously harm our business, financial condition and results of operations.

We are an early stage pharmaceutical

We are an early clinical stage pharmaceutical

research and development company and may never be able to successfully develop marketable products or generate any revenue.

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If we cannot generate sufficient revenues, we may suspend or cease

We are an early stage company and have

not generated any revenues to date and have no operating history.

All of our potential drug compounds are in the concept stage

or early clinical development stage.

Moreover, we cannot be certain that our research and development efforts will be successful

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

We have no relevant operating history upon which an evaluation of our performance and prospects can be made.

We are subject

to all of the business risks associated with a new enterprise, including, but not limited to, risks of unforeseen capital requirements,

failure of potential drug compounds either in non-clinical testing or in clinical trials, failure to establish business relationships

and competitive disadvantages against larger and more established companies.

If we fail to become profitable, we may suspend or

cease operations.

We are an early clinical stage company and

have not generated any revenues to date and have no operating history.

Moreover, we cannot be certain that our research and development

efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sales to pharmaceutical

companies or generate commercial revenues.

We have no relevant operating history upon which an evaluation of our performance and

prospects can be made.

We are subject to all of the business risks associated with a new enterprise, including, but not limited

to, risks of unforeseen capital requirements, failure of potential drug compounds either in non-clinical testing or in clinical

trials, failure to establish business relationships and competitive disadvantages against larger and more established companies.

If we fail to become profitable, we may suspend or cease operations.

We will need additional funding

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development activities.

We will need to raise additional funding

and the current economic conditions may have a negative impact on our ability to raise additional needed capital on terms that

are favorable to our Company or at all.

To date, we have funded our operations primarily

through private placement of our equity securities, grants and our “at the market offering” in connection with an Amended

and Restated Sales Agreement, dated May 1, 2020, with Cantor Fitzgerald & Co.

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

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

time through the Sales Agents.

We will need to raise additional

funding and the current economic conditions may have a negative impact on our ability to raise additional needed capital on terms

that are favorable to our Company or at all.

We may not be able to generate significant revenues for several years, if at all.

we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing.

cannot be certain that additional funding will be available on acceptable terms, or at all.

Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing.

We cannot be certain that additional funding will be available on acceptable terms, or at all.

If adequate funds are not available,

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condition and we will have to delay or terminate some or all of our research and development plans which may force us to cease

All of our potential drug compounds

will require extensive additional research and development, including non-clinical testing and clinical trials, as well as regulatory

approvals, before we can market them.

In particular, human therapeutic products are subject to rigorous non-clinical and clinical

testing and other approval procedures of the FDA and similar regulatory authorities in other countries.

Various federal statutes

and regulations also govern or influence testing, manufacturing, safety, labeling, storage, and record-keeping related to such

products and their marketing.

We cannot predict if or when any of the potential drug compounds we intend to develop will be approved

for marketing.

There are many reasons that we may fail in our efforts to develop our potential drug compounds.

All of our potential drug compounds are exclusively

focused on SIGMAR1 which has not previously been the subject of any approved drug products and will require extensive additional

research and development, including non-clinical testing and clinical trials, as well as regulatory approvals, before we can market

In particular, human therapeutic products are subject to rigorous non-clinical and clinical testing and other approval procedures

of the FDA and similar regulatory authorities in other countries.

Various federal statutes and regulations also govern or influence

testing, manufacturing, safety, labeling, storage, and record-keeping related to such products and their marketing.

We cannot predict

if or when any of the potential drug compounds we intend to develop will be approved for marketing.

There are many reasons that

we may fail in our efforts to develop our potential drug compounds.

These include:

the possibility that non-clinical testing or clinical trials may show

that our potential drug compounds are ineffective and/or cause harmful side effects;

regulators may not authorize us to commence or continue a clinical

trial or may impose a clinical hold or may limit the conduct of a clinical trial through the imposition of a partial clinical

the number of patients required for clinical trials for our drug candidates

may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop

out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we

our third-party contractors, including investigators, may fail to meet

their contractual obligations to us in a timely manner, or at all, or may fail to comply with regulatory requirements;

our potential drug compounds may prove to be too expensive to manufacture

or administer to patients;

our potential drug compounds may fail to receive necessary regulatory

approvals from the United States Food and Drug Administration or foreign regulatory authorities in a timely manner, or at all;

even if our potential drug compounds are approved, we may not be able

to produce them in commercial quantities or at reasonable costs;

even if our potential drug compounds are approved, they may not achieve

commercial acceptance;

regulatory or governmental authorities may apply restrictions to any

of our potential drug compounds, which could adversely affect their commercial success;

the proprietary rights of other parties may prevent us or our potential

collaborative partners from marketing our potential drug compounds.

the possibility that non-clinical

testing or clinical trials may show that our potential drug compounds are ineffective and/or cause harmful side effects;

regulators may not authorize

us to commence or continue a clinical trial or may impose a clinical hold or may limit the conduct of a clinical trial through the

imposition of a partial clinical hold;

the number of patients

required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be

slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration

of these clinical trials may be longer than we anticipate;

our third-party contractors,

including investigators, may fail to meet their contractual obligations to us in a timely manner, or at all, or may fail to comply

with regulatory requirements;

our potential drug compounds

may prove to be too expensive to manufacture or administer to patients;

our potential drug compounds

may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities

in a timely manner, or at all;

even if our potential drug

compounds are approved, we may not be able to produce them in commercial quantities or at reasonable costs;

even if our potential drug

compounds are approved, they may not achieve commercial acceptance;

regulatory or governmental

authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their commercial success;

the proprietary rights

of other parties may prevent us or our potential collaborative partners from marketing our potential drug compounds.

If we fail to develop our potential

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will require substantial additional future funding which could impact our operations and financial condition.

Without the required

additional funds, we will likely cease operations.

It will take several years before we

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capital, arising from costs to:

conduct research, non-clinical testing and human studies;

establish pilot scale and commercial scale manufacturing processes

and facilities;

establish and develop quality control, regulatory, marketing, sales,

finance and administrative capabilities to support these programs.

conduct research, non-clinical testing and human clinical trials;

establish pilot scale and

commercial scale manufacturing processes and facilities;

establish and develop quality

control, regulatory, marketing, sales, finance and administrative capabilities to support these programs.

Our future operating and capital needs

will depend on many factors, including:

the pace of scientific progress in our research and development programs and the magnitude of these programs;

the scope and results of pre-clinical testing and human studies;

the time and costs involved in obtaining regulatory approvals;

the time and costs involved in preparing, filing, prosecuting, securing, maintaining and enforcing patents;

competing technological and market developments;

our ability to establish additional collaborations;

changes in our existing collaborations;

the cost of manufacturing scale-up;

the effectiveness of our commercialization activities.

the pace of scientific

progress in our research and development programs and the magnitude of these programs;

the scope and results of pre-clinical testing and human clinical trials;

the time and costs involved

in obtaining regulatory approvals;

the time and costs involved

in preparing, filing, prosecuting, securing, maintaining and enforcing patents;

competing technological

and market developments;

our ability to establish

additional collaborations;

changes in our existing

collaborations;

the cost of manufacturing

the effectiveness of our

commercialization activities.

We base our outlook regarding the need

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payment of major milestones and other payments.

Additional funds will be required to

support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce further research

and development of our drug product programs, sell some or all our intellectual property, merge with another entity or cease operations.

Additional funds may be required to

support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further

research and development programs of our drug product platform, sell some or all our intellectual property, merge with another

entity or scale back operations.

If we or any companion diagnostic collaborator

of ours are unable to successfully develop and obtain regulatory approval for companion diagnostic tests for our drug candidates,

or experience significant delays in doing so, we may not realize the commercial potential of our drug candidates.

We analyze genomic data from clinical trials

to identify biomarkers, which we use in the analysis of our clinical trials.

Identification of these patients will

require the use and development of companion diagnostics.

According to the FDA’s 2014 guidance document on In Vitro Companion

Diagnostic Devices, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic device

could be essential for the safe and effective use of the corresponding therapeutic product, the premarket application for the companion

diagnostic device should be developed and approved or cleared contemporaneously with the therapeutic.

We do not have experience or capabilities

in developing or commercializing diagnostics.

It may be necessary to resolve issues such as selectivity/specificity, analytical

validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval processes.

Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic

for a drug candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the

companion diagnostic.

We and our future collaborators may encounter difficulties in developing, obtaining regulatory approval for,

manufacturing and commercializing companion diagnostics similar to those we face with respect to our drug candidates, including

issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate

quality standards, and in gaining market acceptance.

If we are unable to successfully develop companion diagnostics for our drug

candidates, or experience delays in doing so, the development of these drug candidates may be adversely affected, these drug candidates

may not obtain marketing approval, and we may not realize the full commercial potential of any of these therapeutics that have

or may obtain marketing approval.

We may not be able to enter into arrangements with another diagnostic company to develop and

obtain regulatory approval for of an alternative diagnostic test for use in connection with the development and commercialization

of our drug candidates or do so on commercially reasonable terms, which could adversely affect and/or delay the development or

commercialization of our therapeutic candidates or therapeutics.

Companion diagnostics are subject to

regulation by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory

approval prior to commercialization.

If we or third parties are unable to successfully develop companion diagnostics for our drug

candidates, or experience delays in doing so:

appropriately

Even if our drug candidates and any

associated companion diagnostics are approved for marketing, the need for companion diagnostics may slow or limit adoption of our

drug candidates.

Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use

of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional prior

to administering our drug candidates.

If any of these events were to occur, our business

and growth prospects would be harmed materially.

All but one of our

clinical trials to date have been conducted outside the United States,

and the FDA and other foreign

regulatory authorities may not accept

data from such trials.

The acceptance

of study data from

clinical trials conducted

outside the United

States by the FDA may

be subject to certain conditions

or may not be accepted at all.

In cases where data from

foreign clinical trials

are intended to serve

as the sole basis

for regulatory approval in the

United States, the

FDA will generally

not approve the application

on the basis of foreign

data alone unless (i)

applicable to the United

States population and United

States medical practice;

(ii) the trials

were performed by clinical investigators

of recognized competence and pursuant

to good clinical practice regulations;

and (iii) the data

may be considered valid

without the need for

an on-site inspection by the

FDA, or if the

FDA considers such inspection to be

necessary, the FDA

is able to validate

the data through

an on-site inspection or other

appropriate means.

regulatory bodies have similar

approval requirements.

such foreign trials would be subject

to the applicable local

laws of the foreign jurisdictions

where the trials are conducted.

There can be no assurance that

the FDA or any other

foreign regulatory authority

will accept data from

trials conducted outside

of the United States

or the applicable jurisdiction.

or any comparable foreign regulatory authority

does not accept such data, it

would result in the need for

additional trials, which would be costly

and time-consuming and delay aspects

of our business plan, and which

may result in our product candidates

not receiving approval or clearance

for commercialization in the

applicable jurisdiction.

We have received Fast Track designation

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the FDA granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett

However, the fast-track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer

supported by data emerging in the clinical trial process.

Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority

review and the ability to submit a rolling application for regulatory review.

Fast Track designation applies to both the product

candidate and the specific indication for which it is being studied.

If any of our compounds receive Fast Track designation but

do not continue to meet the criteria for Fast Track designation, or if our clinical trials are delayed, suspended or terminated,

or put on clinical hold due to unexpected adverse events or issues with clinical supply, we will not receive the benefits associated

with the Fast Track program.

Furthermore, Fast Track designation does not change the standards for approval.

The receipt of Fast

Track designation for a compound may not result in a faster development or regulatory review or approval process compared to products

considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

In addition, even if

any product candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet

the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Fast Track designation

alone does not guarantee qualification for the FDA’s priority review procedures.

Under FDA policies, a compound is eligible

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provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease.

designated compound would ordinarily meet the FDA’s criteria for priority review.

or breakthrough therapy designation for our compounds may not actually lead to a faster review process, and a delay in the review

process or in the approval of our compounds will delay revenue from their potential sales and will increase the capital necessary

to fund these compound development programs.

The FDA determines

whether a drug qualifies for Priority Review after an NDA for such drug is submitted to the FDA.

Therefore, until NDAs are submitted

for our compounds, we cannot be assured that they will be granted Priority Review.

Additionally, even if Priority Review is granted

for one of our compounds, the FDA does not always meet its six-month PDUFA goal date for Priority Review and the review process

is often extended by FDA requests for additional information or clarification.

We may seek Breakthrough Therapy designation

for one or more of our current or future compounds.

Designation as a Breakthrough Therapy is largely within the discretion of the

Accordingly, even if we believe that a compound meets the criteria for designation as a Breakthrough Therapy, the FDA may

disagree and instead determine not to make such designation.

In any event, the receipt of a Breakthrough Therapy designation for

a product candidate may not result in a faster development process, review or approval compared to candidate products considered

for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA.

even if one or more compounds qualify as breakthrough therapies, the FDA may later decide that the product no longer meets the

conditions for qualification and revoke the designation.

Fast track or breakthrough therapy designation

for our compounds may not actually lead to a faster review process, and a delay in the review process or in the approval of our

compounds will delay revenue from their potential sales and will increase the capital necessary to fund these compound development

We have received orphan drug designation for several

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seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

We have received

orphan drug designation for several of our compounds, but exclusive marketing rights in the United States may be limited if we

seek FDA marketing approval for an indication broader than the orphan designated indication.

Additionally, any compound with orphan

drug designation may lose such designation if the FDA later determines that the request for designation was materially defective

or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease

or condition.

In addition, others may obtain orphan drug exclusivity for products addressing the same diseases or conditions as

products we are developing, thus limiting our ability to compete in the markets addressing such diseases or conditions for a significant

period of time.

We have received orphan drug designation

for several of our compounds, but we may not be able to obtain or maintain orphan drug exclusivity in the United States for hose

We may not be the first to obtain marketing approval of any compound for which we have obtained orphan drug designation

for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

exclusive marketing rights in the United States may be limited if we seek FDA marketing approval for an indication broader than

the orphan designated indication.

Additionally, any compound with orphan drug designation may lose such designation if the FDA

later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient

quantities of the product to meet the needs of patients with the rare disease or condition.

Even after an orphan drug is approved,

the FDA can subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the

later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

addition, others may obtain orphan drug exclusivity for products addressing the same diseases or conditions as products we are

developing, thus limiting our ability to compete in the markets addressing such diseases or conditions for a significant period

Orphan drug designation neither shortens the development

time or regulatory review time of a drug nor gives the product candidate any advantage in the regulatory review or approval process

or entitles the product candidate to priority review.

If we fail to demonstrate efficacy

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Examples of problems that could arise include, among others:

efficacy or safety concerns with the potential drug compounds, even if not justified;

manufacturing difficulties or concerns;

regulatory proceedings subjecting the potential drug compounds to potential recall;

publicity affecting doctor prescription or patient use of the potential drug compounds;

pressure from competitive products;

introduction of more effective treatments.

efficacy or safety concerns

with the potential drug compounds, even if not justified;

manufacturing difficulties

regulatory proceedings

subjecting the potential drug compounds to potential recall;

publicity affecting doctor

prescription or patient use of the potential drug compounds;

pressure from competitive

introduction of more effective

Each clinical phase is designed to test

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the market and generate sales of those products may be limited by a number of factors, including the following:

If our competitors receive regulatory approvals for and begin marketing

similar products in the United States, the European Union, Japan and other territories before we do, greater awareness of their

products as compared to ours will cause our competitive position to suffer;

Information from our competitors or the academic community indicating

that current products or new products are more effective or offer compelling other benefits than our future products could impede

our market penetration or decrease our future market share;

The pricing and reimbursement environment for our future products,

as well as pricing and reimbursement decisions by our competitors and by payers, may have an effect on our revenues.

If our competitors receive

regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories

before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer;

Information from our competitors

or the academic community indicating that current products or new products are more effective or offer compelling other benefits

than our future products could impede our market penetration or decrease our future market share;

The pricing and reimbursement

environment for our future products, as well as pricing and reimbursement decisions by our competitors and by payers, may have an

effect on our revenues.

If this happens, our business will be

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if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy.

Our reliance on third parties,

such as university laboratories, contract manufacturing organizations and contract or clinical research organizations, may result

in delays in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements

In the course of product development,

we may engage university laboratories, other biotechnology companies or contract or clinical manufacturing organizations to manufacture

We have advanced our research and development

efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited success

in product development.

We have advanced our research

and development efforts on addressing neurodegenerative, neurodevelopmental and CNS disorders.

Collectively, efforts by pharmaceutical

companies in the field of neurodegenerative, neurodevelopmental and CNS disorders have seen very limited successes in product

The development of neurodegenerative and CNS therapies presents unique challenges, including an imperfect understanding of

the biology, the presence of the blood brain barrier, or BBB, that can restrict the flow of drugs to the brain, a frequent lack of translatability

of preclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be

too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.

Our reliance on third parties, such as

university laboratories, contract manufacturing organizations and contract or clinical research organizations, may result in delays

in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements with

them or non-compliance with regulations.

In the course of product development, we may

engage university laboratories, other biotechnology companies or contract or clinical manufacturing organizations to manufacture

drug material for us to be used in non-clinical and clinical testing and contract research organizations to conduct and manage

non-clinical and clinical studies.

If we engage these organizations to help us with our non-clinical and clinical programs, many

important aspects of this process have been and will be out of our direct control.

non-clinical studies and clinical trials.

If we engage these organizations to help us with our non-clinical and clinical programs,

many important aspects of this process have been and will be out of our direct control.

If any of these organizations we may engage

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of our clinical trials, regulatory filings and the potential market approval of our potential drug compounds.

In addition, any of these third parties may

engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that

violate the regulations of any regulatory authorities, including those laws requiring the reporting of true, complete and accurate

information to such authorities;

healthcare fraud and abuse laws and regulations in the United States and abroad;

require the reporting of financial information or data accurately.

It is not always possible to identify and deter misconduct by

employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling

unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming

from a failure to comply with these laws or regulations.

If we fail to compete successfully

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financial condition or results of operations.

Even if we receive regulatory approval for one or more

compounds, we will be subject to continuing regulatory obligations and ongoing regulatory review, which may result in significant

additional expense.

Additionally, our compounds, if approved, could be subject to labeling and other restrictions on marketing

or withdrawal from the market, and we may be subject to penalties, if we fail to comply with regulatory requirements or if we experience

unanticipated problems with our compounds, when and if any of them are approved.

Even if we receive regulatory

approval for one or more compounds, we will be subject to continuing regulatory obligations and ongoing regulatory review, which

may result in significant additional expense.

Additionally, our compounds, if approved, could be subject to labeling and other

restrictions on marketing or withdrawal from the market, and we may be subject to penalties, if we fail to comply with regulatory

requirements or if we experience unanticipated problems with our compounds, when and if any of them are approved.

Following potential approval of any

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to comply with regulatory requirements, may result in, among other things:

restrictions on the marketing or manufacturing

of our products, withdrawal of the product from the market or voluntary or mandatory product recalls;

fines, restitutions, disgorgement of profits

or revenues, warning letters, untitled letters or holds on clinical trials;

restrictions on product distribution or

use, or requirements to conduct post-marketing studies or clinical trials;

product seizure or detention, or refusal

to permit the import or export of our products;

injunctions or the imposition of civil

or criminal penalties;

refusal by the FDA to approve pending applications

or supplements to approved applications filed by us or suspension or revocation of approvals.

● restrictions

on the marketing or manufacturing of our products, withdrawal of the product from the market

or voluntary or mandatory product recalls;

restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds

on clinical trials;

● restrictions

on product distribution or use, or requirements to conduct post-marketing studies or clinical

seizure or detention, or refusal to permit the import or export of our products;

● injunctions

or the imposition of civil or criminal penalties;

by the FDA to approve pending applications or supplements to approved applications filed

by us or suspension or revocation of approvals.

The occurrence of any event or penalty

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for a compound, physicians may nevertheless lawfully prescribe it to their patients in a manner that is inconsistent with the approved

While the FDA recently clarified that mere knowledge that a physician is prescribing a drug for off label use is not sufficient

to constitute unlawful off-label promotion, if we are found to have actively promoted such off label uses, we may become subject

to significant liability under the FDCA.

The federal government has levied large civil and criminal fines against companies for

alleged improper promotion and has enjoined several companies from engaging in off-label promotion.

The FDA has also requested

that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

While the FDA recently clarified that mere knowledge that a physician is prescribing an approved drug for off label use

is not sufficient to constitute unlawful off-label promotion, if we are found to have actively promoted such off label uses, we

may become subject to significant liability under the FDCA.

The federal government has levied large civil and criminal fines against

companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion.

Additionally,

promotion for off label uses could result in significant liability under the False Claims Act.

The FDA has also requested that

companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

The FDA’s and other regulatory

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that could potentially impact our business and clinical trials.

In addition, the spread of COVID-19

coronavirus has had and may continue to severely impact the trading price of shares of our common stock and could further severely

impact our ability to raise additional capital on a timely basis or at all.

The global outbreak of the COVID-19

coronavirus continues to rapidly evolve.

The extent to which the COVID-19 coronavirus may impact our future business operations,

including our clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot

be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions

and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness

of actions taken in the United States and other countries to contain and treat the disease.

The extent to which the COVID-19 coronavirus

may impact our future business operations, including our clinical trials, and financial condition will depend on future developments,

which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the

duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures

or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the

Moreover, to the

extent the COVID-19 pandemic adversely affects our business, financial condition and results of operations, it may also have the

effect of heightening many of the other risks described in this “Risk Factors” section.

We receive Australian government

research and development income tax incentive refunds.

If our research and development expenditures are not deemed to

be eligible for the refund, proposed modifications to the tax incentive program are enacted, or the tax incentive

program is discontinued by the Australian government, it could have a negative effect on our future cash flows and the

funding of future research and development projects.

Our subsidiary, Anavex Australia Pty

Ltd., is incorporated in Australia where we are currently engaged in research and development activities for ANAVEX ® 2-73

and ANAVEX ® 3-71.

Our subsidiary is eligible to participate in the Australian Federal Government’s

Research and Development Tax Incentive program, under which the government provides a cash refund for a portion of eligible

research and development expenditures (currently 43.5% to 48.5% depending on the entity’s corporate tax rate) by small Australian entities,

which are defined as Australian entities with less than $20 million (Australian) in revenue.

The Research and Development Tax Incentive

refund is offered by the Australian federal government for eligible research and development purposes based on the filing

of an annual application.

As part of this program, our subsidiary applied for and received cash refunds from the Australian Taxation

Office, or the ATO, for a percentage of the research and development costs expended by our subsidiary in Australia.

Since the fiscal

year ended September 30, 2015, we have been receiving Research and Development Tax Incentive refunds related to research

and development expenditures made.

Certain research and development expenses

incurred outside of Australia are also eligible for the Australian research and development tax incentive program,

provided we obtain an Advance Overseas Finding from AusIndustry, a division of the Australian Government’s Department of

Industry, Innovation and Science (“AusIndustry”).

To receive an Advance Overseas Finding, the expenses must have

been for eligible research and development activities, as determined by AusIndustry, and the expenditures must have a scientific

link to the Australian activities, be unable to be conducted in Australia and the total actual and reasonably anticipated

overseas costs must be expected to be less than the total actual and reasonably anticipated expenditures for activities conducted

within Australia, as determined by AusIndustry at the time of application for an Advance Overseas Finding (“OSF”).

This OSF binds

both AusIndustry and the Commissioner of Taxation for three income years.

However, for compliance purposes, specific issue guidance

jointly issued by AusIndustry and the ATO in 2014 provides that an OSF can apply for the duration of the overseas activity provided

the activities are not new or materially different then the activities described in the OSF.

Currently, the Company is outside

of the binding three-year period with respect to OSF applicable to some of its programs being claimed in Australia.

To the extent that some or all of our

research and development expenditures are deemed to be “ineligible,” then our refunds may decrease or be eliminated.

In addition, the Australian government may in the future modify the requirements of, reduce the amounts of the refunds

available under, or discontinue the Research and Development Tax Incentive program.

Any such change to our anticipated

refunds or change to the Research and Development Tax Incentive program would have a negative effect on our future cash

A variety of risks are associated with

operating our business internationally which could materially adversely affect our business.

We are presently

conducting clinical development solely in Australia, United Kingdom, The Netherlands, Germany and Canada

and may choose to conduct additional international and U.S.

clinical trials in the future.

Additionally, while we have not taken

any steps to enter into any non-U.S.

markets, we may do so in the future.

Accordingly, we are subject to risks related to operating

in foreign countries, including:

different standards of care in various countries that could complicate

the evaluation of our product candidates;

different United States and foreign drug import and export rules;

reduced protection for intellectual property rights in certain countries;

unexpected changes in tariffs, trade barriers and regulatory requirements;

economic weakness, including inflation, or political instability in

particular foreign economies and markets;

compliance with tax, employment, immigration, and labor laws for employees

living or traveling abroad;

compliance with the FCPA and other anti-corruption and anti-bribery

foreign taxes, including withholding of payroll taxes;

foreign currency fluctuations, which could result in increased operating

expenses and reduced revenue, and other obligations incident to doing business in another country;

workforce uncertainty in countries where labor unrest is more common

than in the United States;

production shortages resulting from any events affecting raw material

supply or manufacturing capabilities abroad;

different payor reimbursement regimes, governmental payors or patient

self-pay systems and price controls;

potential liability resulting from development work conducted by foreign

business interruptions resulting from natural disasters, outbreaks

of contagious diseases, such as COVID-19, or geopolitical actions, including war and terrorism, or systems failure including cybersecurity

compliance with evolving and expansive foreign regulatory requirements,

including data privacy laws (such as the GDPR).

Additionally, in connection with the ongoing

conflict between Russia and Ukraine, the U.S.

government and European Union countries have imposed enhanced export controls on

certain products and sanctions on certain industry sectors and parties in Russia.

government has also indicated it will

consider imposing additional sanctions and other similar measures in the near future.

Although we do not currently conduct any

clinical trials in Russia or Ukraine, further escalation of geopolitical tensions could have a broader impact that expands into

other markets where we do business or conduct certain research and development operations, which could adversely affect our business,

our supply chain for our product candidates, our collaborators or our ability to carry out our clinical trials.

ability to use our net operating loss (“NOL”) carryforwards and certain tax credit carryforwards may be subject to

As of September 30, 2022, we had $123.4 million

federal and $199.0 million of state and local NOL carryforwards.

We had approximately $10.6 million of NOL carryforwards

in Australia as of the same period.

Our NOL carryforwards are subject to review and possible adjustment by the U.S.

and state tax

In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a corporation undergoes

an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over

a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and research and development credits

to offset its post-change income may be limited.

This could limit the amount of NOLs or research and development credit carryforwards

that we can utilize annually to offset future taxable income or tax liabilities.

Subsequent ownership changes and changes to the

tax rules in respect of the utilization of NOLs and research and development credits carried forward may further affect the

limitation in future years.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or

otherwise limited, which could accelerate or permanently increase state taxes owed.

We conducted a Section 382 study during the

year ended September 30, 2021 and determined that, during the year ended September 30, 2015, there was a change in ownership which

resulted in $25.8 million of federal NOLs being subject to an annual limitation.

During the year ended September 30, 2021, we reduced

our federal NOLs by $12.1 million and our research and development tax credit carryforwards by $0.8 million, which are the amount

of tax assets that will expire unutilized pursuant to the Section 382 study.

This resulted in a reduction of $2.5 million of NOLs

and $0.8 million of research and development credits and a corresponding reduction in the valuation allowance of $3.3 million,

which was recorded in the 2021 fiscal year.

Subsequent ownership changes in future years could trigger additional limitations of

During the year ended September 30, 2022, we determined that there were no changes in ownership pursuant to Section 382.

We are subject to healthcare laws and

regulations which may require substantial compliance efforts and could expose us to criminal sanctions, civil and administrative

penalties, contractual damages, reputational harm and diminished profits and future earnings, among other penalties.

Healthcare providers, physicians and others

will play a primary role in the recommendation and prescription of our products, if approved.

Our arrangements with such persons

and third-party payors and our general business operations will expose us to broadly applicable fraud and abuse and other healthcare

laws and regulations that may constrain the business or financial arrangements and relationships through which we research, market,

sell and distribute our drugs, if we obtain marketing approval.

Restrictions under applicable U.S.

federal, state and foreign healthcare

laws and regulations include, but are not limited to, the following:

federal Anti-Kickback Statute,

which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing

remuneration, including any kickback, bribe or rebate, directly or indirectly, in cash or in kind, to induce or reward, or

in return for, either the referral of an individual for, or the purchase or lease, order or recommendation of, any item, good,

facility or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

federal civil and criminal false

claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal and civil penalties,

including those from civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly

presenting, or causing to be presented, claims for payment that are false or fraudulent or making a false statement to avoid,

decrease, or conceal an obligation to pay money to the federal government;

The Stark Law prohibits a physician from making referrals for certain “designated

health services” payable by Medicare to an entity in which the physician or an immediate family member of such physician has an

ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception

There are a number of exceptions to the Stark Law.

Such exceptions permit certain payments and arrangements that, although they

would otherwise potentially implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific

exceptions are met.

HIPAA, which among other things, created additional federal criminal statutes

that impose criminal and civil liability for, such actions as executing or attempting to execute a scheme to defraud any healthcare benefit

program or knowingly and willingly falsifying, concealing or covering up a material fact or making false statements relating to healthcare

The privacy and security provisions of HIPAA, which impose certain requirements

on covered entities and their business associates, including mandatory contractual terms, with respect to safeguarding the privacy, security

and transmission of individually identifiable health information;

federal transparency requirements

under the Physician Payments Sunshine Act, enacted as part of the Affordable Care Act that require applicable manufacturers

of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and other transfers of value

provided to physicians, certain other healthcare providers (such as physicians assistants and nurse practitioners),and teaching

hospitals, as well as ownership and investment interests held by physicians or their immediate family members;

analogous state or foreign laws and

regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party

payor, including commercial insurers, state marketing and/or transparency laws applicable to manufacturers that may be broader

in scope than the federal requirements, state laws that require biopharmaceutical companies to comply with the biopharmaceutical

industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government

and state laws governing the privacy and security of health information in certain circumstances, many of which differ from

each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance efforts.

Ensuring that our business arrangements with

third parties comply with applicable healthcare laws and regulations will likely be costly.

It is possible that governmental authorities

will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable

fraud and abuse or other healthcare laws and regulations.

If our operations were found to be in violation of any of these laws

or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative

penalties, damages, fines, disgorgement, imprisonment, possible exclusion from government funded healthcare programs, such as Medicare

and Medicaid, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations,

any of which could substantially disrupt our operations.

If the physicians or other providers or entities with whom we expect to

do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions,

including exclusions from government funded healthcare programs.

We may incur significant costs achieving and maintaining compliance

with applicable federal and state privacy, security, and fraud laws.

Any action against us for violation of these laws, even if

we successfully defend against it, could cause us to incur significant legal expenses and divert our attention from the operation

of our business.

We expect current and future legislation

affecting the pharmaceutical industry, including drug pricing reform, to impact our business generally, which could adversely affect

our business operations.

In the United States, there have been, and continue to be proposed and enacted

legislation at the federal and state levels designed to, among other things, bring more transparency to drug pricing, review the relationship

between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement

methodologies for drugs.

For example, in July 2021, the Biden administration released an executive order, “Promoting Competition

in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on

September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform

and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can

take to advance these principles.

In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source

drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases

that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to

legal challenges.

It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical

If any of our products are subject to such negotiation, we may lose a significant amount of the revenues expected during the

full life cycle of these products.

Further, the Biden administration released an additional executive order on October 14, 2022, directing

HHS to submit a report within 90 days on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models

for lowering drug costs for Medicare and Medicaid beneficiaries.

We expect that additional U.S.

federal healthcare reform measures

will be adopted in the future, any of which could limit the amounts that the U.S.

federal government will pay for healthcare products

and services, which could result in reduced demand for our product candidates or additional pricing pressures.

The coverage and reimbursement status

of newly approved products is uncertain.

Failure to obtain or maintain adequate coverage and reimbursement for our product candidates,

if approved, could limit our ability to market those products and decrease our ability to generate product revenue.

Significant uncertainty exists as to the coverage

and reimbursement status of any compound for which we may seek regulatory approval.

Sales in the United States will depend in part

on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health

programs such as Medicare, Medicaid, CHIP, TRICARE and the Veterans Administration, as well as managed care organizations and private

health insurers.

Prices at which we or our customers seek reimbursement for our therapeutic compounds can be subject to challenge,

reduction or denial by payors.

The process for determining whether a payor

will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will

pay for the product.

A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate

will be available.

Additionally, in the United States there is no uniform policy among payors for coverage or reimbursement.

payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies,

but also have their own methods and approval processes.

Therefore, coverage and reimbursement for products can differ significantly

from payor to payor.

If coverage and adequate reimbursement are not available, or are available only at limited levels, successful

commercialization of, and obtaining a satisfactory financial return on, any product we develop may not be possible.

Third-party payors are

increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition

to their safety and efficacy.

In order to obtain coverage and reimbursement for any product that might be approved for marketing, we

may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would

be in addition to the costs expended to obtain regulatory approvals.

Third-party payors may not consider our compounds to be medically

necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may

not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our

investment in drug development.

Additionally, we or our collaborators may develop companion diagnostic tests for use with our

product candidates.

Companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement

for their companion pharmaceutical or biological products.

Similar challenges to obtaining coverage and reimbursement, applicable to

pharmaceutical or biological products, will apply to companion diagnostics.

Our inability to promptly obtain

coverage and adequate reimbursement from third-party payors for the product candidates, and for us or our collaborators to obtain coverage

and adequate reimbursement for related companion diagnostic tests that may be developed, could have a material and adverse effect on

our business, financial condition, results of operations and prospects.

Risks Related to our Common Stock

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you purchase your shares of common stock:

actual or anticipated variations in our quarterly operating results;

announcements of new services, products, acquisitions or strategic

relationships by us or our competitors;

changes in accounting treatments or principles;

changes in earnings estimates by securities analysts and in analyst

recommendations;

general political, economic, regulatory and market conditions.

actual or anticipated variations

in our quarterly operating results;

announcements of new services,

products, acquisitions or strategic relationships by us or our competitors;

changes in accounting treatments

or principles;

changes in earnings estimates

by securities analysts and in analyst recommendations;

general political, economic,

regulatory and market conditions.

The market price for our common stock

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common stock to fall.

Recently, the stockholders of the Company

approved an amendment to our articles of incorporation, increasing the number of authorized shares of common stock to 200,000,000

We also have 10,000,000 shares of preferred stock authorized.

Our Board of Directors has the authority to issue additional

shares of preferred and common stock up to the authorized capital stated in the articles of incorporation.

Our Board of Directors

may choose to issue some or all such shares of common stock to acquire one or more businesses or to provide additional financing

in the future.

The issuance of any such shares of common stock will result in a reduction of the book value or market price of

the outstanding shares of our common stock.

If we do issue any such additional shares of common stock, such issuance also will

cause a reduction in the proportionate ownership and voting power of all other stockholders.

Further, any such issuance may result

in a change of control of our corporation.

In the event we do issue or sell additional shares of common or preferred stock, it

may result in shareholder dilution and may cause our share price to fall.

We may not be able to access sufficient

funds under the Sales Agreement when needed.

On May 1, 2020, we entered into an Amended

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

and SVB Leerink LLC

(the “Sales Agents”), pursuant to which we may offer and sell shares of our common stock registered under an effective

registration statement from time to time through the Sales Agents (the “At-the-Market Offering”).

The Sales Agents

are only obligated to act as our agent in the sale of shares pursuant to the Sales Agreement on a commercially reasonable efforts

basis and subject to certain conditions set forth in the Sales Agreement.

Therefore, we may not in the future,

have access to the full amount available to us under the Sales Agreement.

Any amounts we sell under the Sales Agreement may not

satisfy all of our funding needs, even if we are able and choose to sell and issue all of our common stock currently registered.

We have 200,000,000 shares of common

stock authorized for issuance and we also have 10,000,000 shares of preferred stock authorized.

Our Board of Directors has the

authority to issue additional shares of preferred and common stock up to the authorized capital stated in the articles of incorporation.

Our Board of Directors may choose to issue some or all such shares of common stock to acquire one or more businesses or to provide

additional financing in the future.

The issuance of any such shares of common stock will result in a reduction of the book value

or market price of the outstanding shares of our common stock.

If we do issue any such additional shares of common stock, such

issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders.

Further, any such

issuance may result in a change of control of our corporation.

In the event we do issue or sell additional shares of common or

preferred stock, it may result in stockholder dilution and may cause our share price to fall.

Our stock price has been volatile and

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by many factors, including the following:

announcements

of new data, clinical trial results or those of companies that are perceived to be similar to us;

announcements

related to any delays in any preclinical or clinical trials related to our products;

announcements

related to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar

announcements by companies that are perceived to be similar to us;

ability to meet or exceed expectations of analysts or investors;

that the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment

in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate

than we anticipate or the duration of these clinical trials may be longer than we anticipate;

taken by regulatory agencies with respect to our product candidates or the progress of our clinical studies, including with respect

to any fast track or orphan drug designations;

announcements

of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration

partners or our competitors;

awarded to us or companies that are perceived to be similar to us from outside entities;

in our financial results or those of companies that are perceived to be similar to us;

volume of our common stock;

concerning our collaborations or partners;

impact of the COVID-19 outbreak and its effect on us;

perception of the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community;

or disputes concerning intellectual property rights;

lawsuits, including patent or stockholder litigation;

ability or inability to raise additional capital and the terms on which we raise it;

of our common stock by us or our stockholders;

in the market prices of stocks generally or of companies that are perceived to be similar to us;

economic, industry and market conditions.

announcements of new data, clinical trial results or those of companies that are perceived to be similar to us;

announcements related to any delays in any preclinical or clinical trials related to our products;

announcements related to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar announcements by companies that are perceived to be similar to us;

our ability to meet or exceed expectations of analysts or investors;

news that the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate;

actions taken by regulatory agencies with respect to our product candidates or the progress of our clinical trials, including with respect to any fast track or orphan drug designations;

announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors;

grants awarded to us or companies that are perceived to be similar to us from outside entities;

variations in our financial results or those of companies that are perceived to be similar to us;

trading volume of our common stock;

developments concerning our collaborations or partners;

the impact of the COVID-19 outbreak and its effect on us;

the perception of the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community;

developments or disputes concerning intellectual property rights;

significant lawsuits, including patent or stockholder litigation;

our ability or inability to raise additional capital and the terms on which we raise it;

sales of our common stock by us or our stockholders;

declines in the market prices of stocks generally or of companies that are perceived to be similar to us;

general economic, industry and market conditions.

In addition, companies trading in the stock

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of a “short squeeze.”

In the past several months prior to the filing

of this Annual Report on Form 10-K, securities of certain companies have increasingly experienced significant and extreme volatility

in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have

caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade

at a significantly inflated rate that is disconnected from the underlying value of the company.

Many investors who have purchased

shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the

price per share has declined steadily as interest in those stocks have abated.

There can be no assurance that we will not, in the

future be, a target of a short squeeze, and you may lose a significant portion or all of your investment if you purchase our shares

at a rate that is significantly disconnected from our underlying value.

Securities of certain companies have experienced

significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.”

These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of

those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company.

Many investors

who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original

investment as the price per share has declined steadily as interest in those stocks have abated.

There can be no assurance that

we will not, in the future be, a target of a short squeeze, and you may lose a significant portion or all of your investment if

you purchase our shares at a rate that is significantly disconnected from our underlying value.

If we fail to maintain

an effective system of internal control over financial reporting, we may not be able to accurately report our financial results

or prevent fraud.

As a result, stockholders could lose confidence in our financial and other public reporting, which would harm

our business and the trading price of our common stock.

Pursuant to Section 404

of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting.

We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial

reporting in the future.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to

accurately report our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal

control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material

weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy

and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions

or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities.

Failure to remedy any material weakness

in our internal control over financial reporting, or to implement or maintain other effective control systems required of public

companies, could also restrict our future access to the capital markets.

Our disclosure

controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the

periodic reporting requirements of the Exchange Act.

We designed our disclosure controls and procedures to reasonably assure that

information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management,

and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations

include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or

For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement

causing us to fail to make a required related party transaction disclosure.

Additionally, controls can be circumvented by the

individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Risks Related to our Intellectual

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as a single drug or in other jurisdictions.

The patent position of biotechnology and pharmaceutical

companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been

the subject of much litigation.

In addition, the laws of foreign countries may not protect our rights to the same extent as the

laws of the United States, or vice versa.

Further, we may not be aware of all third-party intellectual property rights potentially

relating to our product candidates.

Publications of discoveries in the scientific literature often lag behind the actual discoveries,

and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or,

in some cases, not at all.

Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in

our patents or pending patent applications, or that we were the first to file for patent protection of such inventions.

the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Our pending and future

patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or which effectively

prevent others from commercializing competitive product candidates.

Even if our patent applications issue as patents, they may

not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise

provide us with any competitive advantage.

Our competitors may be able to circumvent our patents by developing similar or alternative

product candidates in a non-infringing manner.

Moreover, we may be subject to a third-party

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may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

We hold ownership or exclusive rights

to nine issued U.S.

patent, ten U.S.

We hold ownership or exclusive rights to seventeen

patents, nineteen U.S.

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

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intellectual property for a number of reasons, including the following:

Competitors may interfere

with our patenting process in a variety of ways.

Competitors may claim that Anavex is not entitled to an issued patent for a variety

of legal reasons.

Competitors may interfere with our patenting process in a variety of ways.

Competitors may claim that Anavex is not entitled to an issued patent for a variety of legal reasons.

Competitors may also claim that we are infringing their patents and restrict our freedom to operate.

or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all of our patent protection.

If a court or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all of our patent protection.

As a company, we have no meaningful experience with competitors interfering with our patents or patent applications.

Because of the time,

money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing potential

drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.

Issuance of a patent

may not provide significant practical protection.

If we receive a patent of narrow scope, then it may be possible for competitors

to design products that do not infringe our patent(s).

Anavex is seeking patent

protection for a number of indications, combination products and drug regimens.

The lack of patent protection in global markets

for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less attractive

to potential partners.

Defending a patent lawsuit

takes significant time and can be very expensive.

If a court decides that

an Anavex compound, its method of manufacture or use, infringes on the competitor’s patent, we may have to pay substantial

damages for infringement.

A court may prohibit

us from making, selling or licensing the potential drug compound unless the patent holder grants a license.

A patent holder is

not required to grant a license.

If a license is available, we may have to pay substantial royalties or grant cross licenses to

our patents, and the license terms may be unacceptable.

Redesigning our potential

drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds and time.

Because of the time, money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing potential drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.

Issuance of a patent may not provide significant practical protection.

If we receive a patent of narrow scope, then it may be possible for competitors to design products that do not infringe our patent(s).

Anavex is seeking patent protection for a number of indications, combination products and drug regimens.

The lack of patent protection in global markets for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less attractive to potential partners.

Defending a patent lawsuit takes significant time and can be very expensive.

If a court decides that an Anavex compound, its method of manufacture or use, infringes on the competitor’s patent, we may have to pay substantial damages for infringement.

A court may prohibit us from making, selling or licensing the potential drug compound unless the patent holder grants a license.

A patent holder is not required to grant a license.

If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents, and the license terms may be unacceptable.

Redesigning our potential drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds and time.

It is also unclear whether our trade

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drug compounds developed in collaboration with other parties, all with attendant risk, distraction, expense, and lack of predictability.

Patent terms may be inadequate to protect

our competitive position on our product candidates for an adequate amount of time.

Patents have a limited lifespan.

In the United

States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.

non-provisional filing date.

Various extensions may be available, but the life of a patent, and the protection it affords, is limited.

Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from

competitive products, including generics or biosimilars.

Given the amount of time required for the development, testing and regulatory

review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing

products similar or identical to ours.

Depending upon the timing, duration and specifics

of FDA marketing approval of product candidates that we identify, one of the U.S.

patents covering such product candidate or the

use thereof may be eligible for up to five years of patent term extension under the Hatch-Waxman Act.

The Hatch-Waxman Act allows

a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory

review process.

A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of

product approval and only those claims covering such approved drug product, a method for using it or a method for manufacturing

it may be extended.

Patent term extension also may be available in certain foreign countries upon regulatory approval of our product

Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because

of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within

applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental

authority could be less than we request.

If we are unable to obtain patent term extension or restoration, or the term of any such

extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened

and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be

reduced, possibly materially.

Also, there are detailed rules and requirements

regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations,

or the Orange Book.

We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy

the requirements for listing in the Orange Book.

Even if we submit a patent for listing in the Orange Book, the FDA may decline

to list the patent, or a manufacturer of generic drugs may challenge the listing.

If one of our product candidates is approved

and a patent covering that product candidate is not listed in the Orange Book, a manufacturer of generic drugs would not have to

provide advance notice to us of any abbreviated new drug application filed with the FDA to obtain permission to sell a generic

version of such product candidate.

If we fail to comply with our

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scope of rights granted under the license agreement and other interpretation-related issues;

extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not

subject to the licensing agreement;

extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject

to the licensing agreement;

sublicensing of patent and other rights under our collaborative development relationships;

diligence obligations under the license agreement and what activities satisfy those diligence obligations;

inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our

licensors and us and our partners;

the priority of invention of patented technology.

inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors

and us and our partners;

priority of invention of patented technology.

In addition, the agreements under which

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property infringement may prevent or delay our development and commercialization efforts.

Our success will also depend in part

on our ability to commercialize our compounds without infringing the proprietary rights of others.

We have not conducted extensive

freedom of use patent searches and no assurance can be given that patents do not exist or could be issued which would have an adverse

effect on our ability to market our technology or maintain our competitive position with respect to our technology.

If our compounds

or other subject matter are claimed under other United States patents or other international patents or are otherwise protected

by third party proprietary rights, we may be subject to infringement actions.

In such event, we may challenge the validity of such

patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop, manufacture

or market our technology.

There can be no assurances that we would be successful in a challenge or be able to obtain such licenses

or that such licenses, if available, could be obtained on commercially reasonable terms.

Furthermore, the failure to succeed in

a challenge, develop a commercially viable alternative or obtain needed licenses could be materially adverse.

Adverse consequences

include delays in marketing some or all of our potential drug compounds based on our drug technology or the inability to proceed

with the development, manufacture or sale of potential drug compounds requiring such licenses.

If we defend ourselves against charges

of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless

of whether we are successful.

Such proceedings are typically protracted with no certainty of success.

An adverse outcome could

subject us to significant liabilities to third parties and force us to curtail or cease the research and development of our technology.

Our success will also depend in part on our

ability to commercialize our compounds without infringing the proprietary rights of others.

However, our research, development

and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other intellectual property

rights owned or controlled by third parties.

We have not conducted

extensive freedom of use patent searches and no assurance can be given that patents do not exist or could be issued which would

have an adverse effect on our ability to market our technology or maintain our competitive position with respect to our technology.

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result

in issued patents that our product candidates may infringe.

In addition, third parties may obtain patents in the future and claim

that use of our technologies infringes upon these patents.

If our compounds or other subject matter are claimed under other United

States patents or other international patents or are otherwise protected by third party proprietary rights, we may be subject to

infringement actions.

In such event, we may challenge the validity of such patents or other proprietary rights or we may be required

to obtain licenses from such companies in order to develop, manufacture or market our technology.

There can be no assurances that

we would be successful in a challenge or be able to obtain such licenses or that such licenses, if available, could be obtained

on commercially reasonable terms.

Furthermore, the failure to succeed in a challenge, develop a commercially viable alternative

or obtain needed licenses could be materially adverse.

Adverse consequences include delays in marketing some or all of our potential

drug compounds based on our drug technology or the inability to proceed with the development, manufacture or sale of potential

drug compounds requiring such licenses.

If we defend ourselves against charges of patent infringement or to protect our proprietary

rights against third parties, substantial costs will be incurred regardless of whether we are successful.

Such proceedings are

typically protracted with no certainty of success.

An adverse outcome could subject us to significant liabilities to third parties

and force us to curtail or cease the research and development of our technology.

Parties making claims against us may

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using that technology or information to compete with us, which could harm our competitive position.

Although we are not currently

involved in any litigation, we may become involved in lawsuits to protect or enforce our patents or other intellectual property,

which could be expensive, time consuming and unsuccessful.

We may be subject to claims that our

employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or

that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

As is common in the biotechnology and pharmaceutical

industry, we employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies,

including our competitors or potential competitors.

Although we try to ensure that our employees, consultants and independent contractors

do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees,

consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade

secrets or other proprietary information, of any of our employee’s former employer or other third parties.

Litigation may

be necessary to defend against these claims.

If we fail in defending any such claims, in addition to paying monetary damages, we

may lose valuable intellectual property rights or personnel, which could adversely impact our business.

Even if we are successful

in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Although we are not currently involved

in any litigation, we may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could

be expensive, time consuming and unsuccessful and could harm our business.

Competitors may infringe our patents

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or sufficient to prevent them from competing.

Changes in patent law could diminish

the value of our patents and patent applications in general, thereby impairing our ability to protect our product candidates.

Changes in either the patent laws or interpretation

of the patent laws in the United States and other countries could increase the uncertainties and costs surrounding the prosecution

of patent applications and the enforcement or defense of issued patents.

After March 2013, under the Leahy-Smith America Invents

Act, or the America Invents Act, enacted in September 2011, the United States transitioned to a first inventor to file system in

which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled

to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.

A third party

that files a patent application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention

of ours even if we had made the invention before it was made by such third party.

This will require us to be cognizant of the time

from invention to filing of a patent application.

Since patent applications in the United States and most other countries are confidential

for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i)

file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s

patents or patent applications.

The America Invents Act also includes a number of significant changes that affect the way patent

applications will be prosecuted and also may affect patent litigation.

Therefore, the America Invents Act and its implementation

could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the

enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business,

financial condition, results of operations, and prospects.

In addition, the patent positions of companies

in the development and commercialization of pharmaceuticals are particularly uncertain.

Supreme Court rulings have

narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain

This combination of events has created uncertainty with respect to the validity and enforceability of patents, once

Depending on future actions by the U.S.

Congress, the federal courts, and the USPTO, the laws and regulations governing

patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability

to protect and enforce our intellectual property in the future.

The risk factors disclosed in this Annual

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We do not own any real property.

maintain a corporate head office at 51 West 52nd Street, 7 th Floor, New York, NY, USA.

Our lease costs for this office

are approximately $4,500 per month.

We believe our offices are suitable and adequate to operate our business currently, as they

provide us with sufficient space to conduct our operations.

maintain a corporate head office at 630 5th Avenue, 20th Floor, New York, NY, USA.

Our lease costs for this office are approximately

$9,500 per month.

We believe our offices are suitable and adequate to operate our business currently, as they provide us with sufficient

space to conduct our operations.

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-K

Item 1A. Risk Factors