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Item 1. Business

2023-11-27 compared with 2022-11-28 · 604 added, 486 removed, 881 unchanged (55% of the section changed)

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Our lead product candidate, ANAVEX ® 2-73

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

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

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

(blarcamesine), is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central

nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by

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

We currently have two core programs and two

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* = Orphan Drug Designation by the FDA;

Dashed lines indicate planned clinical trials to-date

Ongoing trial

Anavex has a portfolio of compounds varying

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to activate quantitatively the SIGMAR1, we performed, in collaboration with Stanford University, a quantitative Positron Emission

Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ® 2-73 target engagement or receptor

occupancy with SIGMAR1 in the brain.

Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ® 2-73 (blarcamesine) target engagement

or receptor occupancy with SIGMAR1 in the brain.

Reyes S et al., Sci Rep.

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With the SIGMAR1 activation through SIGMAR1

agonists like ANAVEX ® 2-73, our approach is to restore cellular balance (i.e.

agonists like ANAVEX ® 2-73 (blarcamesine), our approach is to restore cellular balance (i.e.

homeostasis).

Therapies that correct

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

ANAVEX ® 2-73-specific Biomarkers

that correct defects in cellular homeostasis might have the potential to halt or delay neurodevelopmental and neurodegenerative

disease progression.

ANAVEX ® 2-73 (blarcamesine)-specific

As part of some of our clinical trials, we

have incorporated a genomic analysis to better understand potential populations for whom our clinical programs might benefit.

our clinical trials, a full genomic analysis of Alzheimer’s disease patients treated with ANAVEX ® 2-73 has

helped us identify actionable genetic variants.

A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73

and COMT, a gene involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73-specific

biomarker hypothesis.

We believe that excluding patients with SIGMAR1 identified biomarker variant (approximately 10%-20%

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

improved functional and cognitive scores.

The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73,

which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides

support for the potential precision medicine clinical development of ANAVEX ® 2-73 by using genetic biomarkers identified

within the trial population itself to target patients who are most likely to respond to ANAVEX ® 2-73 treatment.

may in the future utilize such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia

or Rett syndrome in which ANAVEX ® 2-73 is currently being studied.

our clinical trials, a full genomic analysis of Alzheimer’s disease patients treated with ANAVEX ® 2-73 (blarcamesine)

has helped us identify actionable genetic variants.

A significant impact of the genomic biomarkers SIGMAR1, the direct target of

ANAVEX ® 2-73 (blarcamesine) and COMT, a gene involved in memory function, on the drug response level was identified,

leading to an early ANAVEX ® 2-73 (blarcamesine)-specific biomarker hypothesis.

We believe that excluding patients

with SIGMAR1 identified biomarker variant (approximately 10%-20% of the population) in prospective studies would identify approximately

80%-90% patients that would display clinically significant improved functional and cognitive scores.

The consistency between the

identified DNA and RNA data related to ANAVEX ® 2-73 (blarcamesine), which are considered independent of Alzheimer’s

disease pathology, as well as multiple endpoints and time-points, provides support for the potential precision medicine clinical

development of ANAVEX ® 2-73 (blarcamesine) by using genetic biomarkers identified within the trial population itself

to target patients who are most likely to respond to ANAVEX ® 2-73 (blarcamesine) treatment.

We may in the future

utilize such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia or Rett syndrome

in which ANAVEX ® 2-73 (blarcamesine) is currently being studied.

Clinical Trials Overview

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2a trial have allowed participants who completed the 52-week Part B of the trial to continue taking ANAVEX ® 2-73,

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

In August 2020, patients

completing these Phase 2a trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the

Australian Government Department of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme.

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

In August 2020, patients completing

these Phase 2a trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the Australian

Government Department of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme.

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

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The Phase 2b/3 trial enrolled 509 patients,

for 48 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses or placebo.

The trial commenced in Australia;

and during fiscal 2020 additional regions were added in the United Kingdom, The Netherlands, Germany and Canada.

Primary and secondary

endpoints will assess safety and both cognitive and functional efficacy, measured through Alzheimer’s Disease Assessment

Scale – Cognition (ADAS-Cog), ADCS-ADL and Clinical Dementia Rating – Sum of Boxes for cognition and function (CDR-SB).

In addition to the primary endpoints, the ANAVEX ® 2-73 Phase 2b/3 trial design incorporated pre-specified statistical

analyses related to potential genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a clinical

The trial completed enrollment in June 2021, exceeding the 450 patient enrollment target at 52 sites across Canada, Europe

and Australia.

In October 2019, we initiated a long-term

open label extension study of ANAVEX ® 2-73, entitled the ATTENTION-AD trial, for patients who have completed the

48-week Phase 2b/3 placebo-controlled trial referenced above.

This trial extension for an additional two years gives patients

the opportunity to continue their treatment.

Upon request by patients, caretakers and investigators, this extension trial was

extended by one additional year.

which were treated with a convenient once-daily oral formulation of ANAVEX ® 2-73 for 48 weeks, randomized 1:1:1 to

two different ANAVEX ® 2-73 doses or placebo.

The trial took place at 52 sites across North America, Europe and Australia.

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

Disease Assessment Scale – Cognitive Subscale test (“ADAS-Cog”), Alzheimer’s Disease Cooperative Study

– Activities of Daily Living (“ADCS-ADL”) and Clinical Dementia Rating – Sum of Boxes for cognition and

function (“CDR-SB”).

In addition to the primary endpoints, the ANAVEX ® 2-73 Phase 2b/3 trial design incorporated

pre-specified statistical analyses related to potential genomic precision medicine biomarkers previously identified in the ANAVEX ® 2-73

Phase 2a clinical trial.

The trial was completed in mid-2022 and, in December 2022, the Company presented positive topline results

from the Phase 2b/3 clinical trial.

ANAVEX ® 2-73 met the co-primary

endpoints ADAS-Cog and ADCS-ADL and key secondary endpoint CDR-SB.

ANAVEX ® 2-73 treatment slowed decline of cognition

and function in patients with early Alzheimer’s disease over 48 weeks.

Patients treated with ANAVEX ® 2-73 had

1.84 times higher odds, or likelihood, to improve cognitively compared to placebo, with a ADAS-Cog score threshold change of -0.5

points or better [Odds Ratio = 1.84 (p = 0.015)].

At clinically significant levels of improvement in function (ADCS-ADL score threshold

change of +3.5 points or better), patients treated with ANAVEX ® 2-73 had 2.67 times higher odds, or likelihood, to

improve function compared to placebo [Odds Ratio = 2.67 (p = 0.0255)].

Additionally, treatment with

ANAVEX ® 2-73 reduced cognitive decline at end of treatment, measured with the ADAS-Cog, as compared to placebo, by

45%, representing a treatment difference in mean score change of -1.85 points (p=0.033).

Compared to placebo, ANAVEX ® 2-73

reduced clinical decline of cognition and function by 27% with mean score difference of -0.42 points (p=0.040) as measured by the

ANAVEX ® 2-73 was generally safe and well tolerated.

All statistical analyses were

performed by outside consultancy companies.

In September 2023, we provided additional

data demonstrating that the clinical effect was complemented by two independent biomarkers.

A significant reduction in pathological

amyloid beta levels in plasma, as well as a significant slowing in the rate of pathological brain atrophy on MRI (Magnetic Resonance

Imaging) scans.

Validated biomarkers of amyloid beta pathology, plasma Aβ42/40 ratio increased significantly (P = 0.048),

demonstrating strong anti-amyloid effects of ANAVEX ® 2-73 in Alzheimer’s disease patients, while MRI revealed

significant reduction in brain volume loss, including whole brain (P = 0.0005), comparing treatment to placebo.

Furthermore, all prespecified clinical

endpoints were further analyzed using a mixed model for repeated measures (MMRM).

Under the multiplicity control rule, a trial

is successful in meeting the co-primary endpoints if the significance of each endpoint is P < 0.05, or if the significance of

only one co-primary endpoint is P < 0.025.

If only one primary endpoint is significant at an α level of 0.025, then the

secondary endpoint will be evaluated at the same level of 0.025.

The trial was successful, since the differences in the least-squares

mean (LSM) change from baseline to 48 weeks between the ANAVEX ® 2-73 and placebo groups were −1.783 [95% CI,

−3.314 to −0.251];

(P = 0.0226) for ADAS-Cog13, and −0.456 [95% CI, −0.831 to −0.080];

for CDR-SB in patients with early Alzheimer’s disease.

In the respective safety population,

common treatment-emergent adverse events included dizziness, which was transient and mostly mild to moderate in severity, and occurred

in 120 participants (35.8%) during titration and in 76 participants (25.2%) during maintenance with ANAVEX ® 2-73

and 10 (6.0%) during titration and 9 (5.6%) during maintenance with placebo.

A subsequent long-term open label extension

study of ANAVEX ® 2-73, entitled the ATTENTION-AD trial was initiated for patients who have completed the 48-week

Phase 2b/3 placebo-controlled trial referenced above.

This trial extension for an additional 96 weeks is currently ongoing, and

provides an opportunity to evaluate longer term safety and efficacy of ANAVEX ® 2-73 in persons with Alzheimer’s

Rett Syndrome

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The data demonstrated dose related and

significant improvements in an array of behavioral and gait paradigms in a mouse model with a MECP2-null mutation that causes neurological

symptoms that mimic Rett syndrome.

significant improvements in an array of behavioral and gait paradigms in a mouse model with an MECP2-null mutation that causes

neurological symptoms that mimic Rett syndrome.

The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”).

In January 2017, we were awarded a financial grant

from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter Phase 2 clinical trial of ANAVEX ® 2-73

for the treatment of Rett syndrome.

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

In January 2017, we were awarded a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs

of a multicenter Phase 2 clinical trial of ANAVEX ® 2-73 for the treatment of Rett syndrome.

This award was received

in quarterly instalments which commenced during fiscal 2018.

In March 2019, we commenced the first Phase

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of ANAVEX ® 2-73.

The first Phase 2 trial, (ANAVEX®2-73-RS-001), which took place in the

United States, was completed in December 2020.

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

efficacy trial of oral liquid ANAVEX ® 2-73 formulation in 25 adult female patients with Rett syndrome over a 7-week treatment

period including ANAVEX ® 2-73-specific genomic precision medicine biomarkers.

The first Phase 2 trial, (ANAVEX ® 2-73-RS-001),

which took place in the United States, was completed in December 2020.

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

safety, tolerability, PK and efficacy trial of oral liquid ANAVEX ® 2-73 formulation in 25 adult female patients with

Rett syndrome over a 7-week treatment period including ANAVEX ® 2-73-specific genomic precision medicine biomarkers.

The primary endpoint of the trial was safety.

The dosing of 5 mg ANAVEX ® 2-73 was well-tolerated and demonstrated dose-proportional PK.

All secondary efficacy endpoints

of the trial showed statistically significant and clinically meaningful response in the Rett Syndrome Behaviour Questionnaire (“RSBQ”)

response, when compared to placebo, in the intent to treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73

treated subjects showed a statistically significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the

ITT cohort (all participants, p = 0.011).

ANAVEX ® 2-73 treatment resulted in a sustained improvement in Clinical Global

Impression Improvement (“CGI-I”) response throughout the 7-week clinical trial, when compared to placebo in the ITT cohort

(all participants, p = 0.014).

Consistent with previous ANAVEX ® 2-73 clinical trials, patients carrying the common form

of the SIGMAR1 gene treated with ANAVEX ® 2-73 experienced stronger improvements in the prespecified efficacy endpoints.

The second, international

trial of ANAVEX ® 2-73 for the treatment of Rett syndrome, called the AVATAR trial, commenced in June 2019.

trial took place in Australia and the United Kingdom using a higher dose than the U.S.

based Phase 2 trial for Rett syndrome.

The trial was a Phase 3 randomized, double-blind, placebo-controlled trial to evaluate the safety and efficacy of ANAVEX ® 2-73

in 33 adult patients over a 7-week treatment period including ANAVEX ® 2-73 specific precision medicine biomarkers.

The dosing of 5 mg ANAVEX ® 2-73 was well-tolerated and demonstrated

dose-proportional PK.

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

response in the Rett Syndrome Behaviour Questionnaire (“RSBQ”) response, when compared to placebo, in the intent to

treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73 treated subjects showed a statistically

significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the ITT cohort (all participants, p =

ANAVEX ® 2-73 treatment resulted in a sustained improvement in Clinical Global Impression Improvement (CGI-I)

response throughout the 7-week clinical trial, when compared to placebo in the ITT cohort (all participants, p = 0.014).

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

experienced stronger improvements in the prespecified efficacy endpoints.

second, international trial of ANAVEX ® 2-73 for the treatment of Rett syndrome, called the AVATAR trial, commenced

in June 2019.

This trial took place in Australia and the United Kingdom using a higher dose than the U.S.

based Phase 2

trial for Rett syndrome.

The trial was a Phase 3 randomized, double-blind, placebo-controlled trial to evaluate the safety and

efficacy of ANAVEX ® 2-73 in 33 adult patients over a 7-week treatment period including ANAVEX ® 2-73

specific precision medicine biomarkers.

Based upon the input from the successful U.S.

Phase 2 Rett syndrome trial (ANAVEX®2-73-RS-001), we updated the endpoints for

the AVATAR trial (ANAVEX®2-73-RS-002) to appropriately assess the clinically meaningful outcome following International Conference

on Harmonization (ICH) guidelines.

These updates were approved by the respective regulatory authorities in the U.K.

and in Australia,

respectively, where the AVATAR trial was conducted.

The data from the AVATAR trial was released in February 2022.

trial met all primary and secondary efficacy and safety endpoints, with consistent improvements in primary efficacy endpoint, RSBQ response

(p = 0.037), and secondary efficacy endpoints, ADAMS (p = 0.010) and CGI-I (p = 0.037) response.

Efficacy endpoints demonstrated statistically

significant and clinically meaningful reductions in Rett syndrome symptoms.

Convenient once daily oral liquid doses of up to 30 mg of

ANAVEX ® 2-73 were also well tolerated with good medication compliance.

All patients who participated in the trial were

eligible to receive ANAVEX ® 2-73 under a voluntary open label extension protocol.

Phase 2 Rett syndrome trial (ANAVEX ® 2-73-RS-001),

we updated the endpoints for the AVATAR trial (ANAVEX ® 2-73-RS-002) to appropriately assess the clinically meaningful

outcome following International Conference on Harmonization (ICH) guidelines.

These updates were approved by the respective regulatory

authorities in the U.K.

and in Australia, respectively, where the AVATAR trial was conducted.

The data from the AVATAR trial was released

in February 2022.

The clinical trial met all primary and secondary efficacy and safety endpoints, with consistent improvements

in primary efficacy endpoint, RSBQ response (p = 0.037), and secondary efficacy endpoints, ADAMS (p = 0.010) and CGI-I (p = 0.037)

Efficacy endpoints demonstrated statistically significant and clinically meaningful reductions in Rett syndrome symptoms.

Convenient once daily oral liquid doses of up to 30 mg of ANAVEX ® 2-73 were also well tolerated with good medication

All patients who participated in the trial were eligible to receive ANAVEX ® 2-73 under a voluntary open

label extension protocol.

In July 2020, we commenced the third trial

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ANAVEX ® 2-73 specific precision medicine biomarkers.

All patients who participate in the trial will be eligible

to receive ANAVEX ® 2-73 under a voluntary open label extension protocol, which is currently ongoing.

This trial completed enrollment in February 2023, exceeding

the original enrollment target.

In June 2023, this trial completed dosing of all participants, and topline results are expected

in the second half of 2023.

All patients who participate in the trial will be eligible to receive ANAVEX ® 2-73 under

a voluntary open label extension protocol, which is currently ongoing.

Parkinson’s Disease

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data announced in October 2017 indicated that ANAVEX ® 2-73 induced robust neurorestoration in experimental Parkinsonism.

We believe that the encouraging results we have gathered in this preclinical model, coupled with the favorable profile of this

product candidate in the Alzheimer’s disease trial, support the notion that ANAVEX ® 2-73 has the potential

to treat Parkinson’s disease dementia.

We believe the encouraging results we have gathered in this preclinical model, coupled with the favorable profile of this product

candidate in the Alzheimer’s disease trial, support the notion that ANAVEX ® 2-73 has the potential to treat

Parkinson’s disease dementia.

In October 2020, we completed a double-blind,

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Treatment with ANAVEX ® 2-73 also resulted in clinically meaningful improvements as measured by the global composite

score of Parkinson’s disease symptom severity, MDS-Unified Parkinson’s Disease Rating Scale total score on top of standard

of care including dopaminergic therapy, levodopa and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX ® 2-73’s

potential capability of slowing and reversing symptoms that progress in Parkinson’s disease.

In addition, the trial confirmed

the precision medicine approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ® 2-73 may result

in improved clinical outcomes.

score of Parkinson’s disease symptom severity, MDS-Unified Parkinson’s Disease Rating Scale (“MDS-UPDRS”)

total score on top of standard of care including dopaminergic therapy, levodopa and other anti-PD medications after 14 weeks of

treatment, suggesting ANAVEX ® 2-73’s potential capability of slowing and reversing symptoms that progress in

Parkinson’s disease.

In addition, the trial confirmed the precision medicine approach of targeting SIGMAR1 as a genetic biomarker

in response to ANAVEX ® 2-73 may result in improved clinical outcomes.

A 48-week Open Label Extension (“OLE”)

ANAVEX2-73-PDD-EP-001 Phase 2 trial was offered to participants after completion of the double-blind placebo-controlled ANAVEX2-73-PDD-001

Phase 2 trial discussed above.

The OLE trial assessed safety, tolerability and efficacy, measuring among others, MDS-Unified Parkinson’s

Disease Rating Scale Parts I, II, III, REM Sleep Behavior Disorder Screening Questionnaire (RBDSQ), Clinical Global Impression

– Improvement (CGI-I), as well as cognitive efficacy endpoint Montreal Cognitive Assessment (MoCA) over a 48-week period.

In March 2023, we reported the preliminary

ANAVEX2-73-PDD-EP-001 OLE trial data, which demonstrated longitudinal beneficial effects of ANAVEX ® 2-73 on the prespecified

primary and secondary objectives.

Preliminary analysis reveals that ANAVEX ® 2-73 was found to be generally safe and

well tolerated;

and safety findings in this trial were consistent with the known safety profile of ANAVEX ® 2-73.

In respect to efficacy, across all efficacy endpoints, patients performed better while on ANAVEX ® 2-73.

patients were on drug holiday due to COVID-19 between the DB EOT and the OLE Baseline, the respective efficacy endpoints, including

the MDS-UPDRS Part II + III and CGI-I, measured at the end of trial of the double-blind study (DB EOT) and the OLE Baseline, were

worsening, as expected in a progressive disease like Parkinson’s.

However, when patients resumed daily oral ANAVEX ® 2-73

treatment, a consistent improvement was observed during the extension phase from OLE Baseline through OLE Week 24, and OLE Week

48, respectively.

These results are consistent with the pattern observed for all efficacy measures in the extension phase.

two endpoints, MDS-UPDRS Part II + III and CGI-I measured in this study are the planned primary and key secondary endpoints in

our forthcoming pivotal 6-month Parkinson’s disease study.

In January 2021, we were awarded a research

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The award will explore utilization of PET imaging biomarkers to enable measurement

of target engagement and pathway activation of the SIGMAR1 with clinically relevant doses in people with Parkinson’s disease.

Frontotemporal Dementia

of target engagement and pathway activation of the SIGMAR1 with clinically relevant doses, including in people with Parkinson’s

Schizophrenia, Frontotemporal Dementia and

Alzheimer’s disease

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

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for the treatment of Frontotemporal Dementia (“FTD”) by the FDA.

ANAVEX ® 3-71 is an orally administered small molecule

targeting sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.

In preclinical

studies, ANAVEX ® 3-71 demonstrated disease-modifying activity against the major hallmarks of Alzheimer’s disease

in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, as well as beneficial effects on mitochondrial

dysfunction and neuroinflammation.

The Phase 1 clinical trial was a prospective

double-blind, randomized, placebo-controlled trial in Australia.

A total of 36 healthy male and female subjects were included.

Single escalating doses of ANAVEX ® 3-71 were administered in order to evaluate the safety, tolerability, and PK of

ANAVEX ® 3-71 and the effects of food and gender on its PK in healthy volunteers.

The trial met its primary and secondary endpoints

of safety, with no serious adverse events (“SAEs”) or dose-limiting toxicities observed.

ANAVEX ® 3-71

was well tolerated in all cohorts receiving ANAVEX ® 3-71 in single doses ranging from 5 mg to 200 mg daily with no

SAEs and no significant lab abnormalities in any subject.

In the trial, ANAVEX ® 3-71 exhibited linear PK.

Its pharmacokinetics

was also dose proportional for doses up to 160 mg.

Gender had no effect on the PK of the drug and food had no effect on the bioavailability

of ANAVEX ® 3-71.

The trial also met the secondary objective of characterizing the effect of ANAVEX ® 3-71

on electrocardiogram (“ECG”) parameters.

There were no clinically significant ECG parameters throughout the trial.

Participant QTcF measures were normal across all dose groups with no difference between ANAVEX ® 3-71 and placebo.

Based on these results, and ANAVEX ® 3-71’s

pre-clinical profile, we intend to advance ANAVEX ® 3-71 into a biomarker-driven clinical development dementia program

for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect of treatment with ANAVEX ® 3-71.

We believe the results of these clinical trials and preclinical study could serve as the basis for advancing into respective registration

studies in the U.S.

ANAVEX ® 3-71 is an orally administered

small molecule targeting sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.

In preclinical studies, ANAVEX ® 3-71 demonstrated disease-modifying activity

against the major hallmarks of Alzheimer’s disease in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and

tau pathologies, as well as beneficial effects on mitochondrial dysfunction and neuroinflammation.

1 clinical trial was a prospective double-blind, randomized, placebo-controlled trial in Australia.

A total of 36 healthy male

and female subjects were included.

Single escalating doses of ANAVEX ® 3-71 were administered in order to evaluate

the safety, tolerability, and PK of ANAVEX ® 3-71 and the effects of food and gender on its PK in healthy volunteers.

met its primary and secondary endpoints of safety, with no serious adverse events (“SAEs”) or dose-limiting toxicities

ANAVEX ® 3-71 was well tolerated in all cohorts receiving ANAVEX ® 3-71 in single doses ranging

from 5 mg to 200 mg daily with no SAEs and no significant lab abnormalities in any subject.

In the trial, ANAVEX ® 3-71

exhibited linear PK.

Its pharmacokinetics was also dose proportional for doses up to 160 mg.

Gender had no effect on the PK of

the drug and food had no effect on the bioavailability of ANAVEX ® 3-71.

The trial also met the secondary objective

of characterizing the effect of ANAVEX ® 3-71 on electrocardiogram (“ECG”) parameters.

There were no clinically

significant ECG parameters throughout the trial.

Participant QTcF measures were normal across all dose groups with no difference

between ANAVEX ® 3-71 and placebo.

2023 a peer-reviewed publication in the journal Neurobiology of Aging, titled “Early treatment with an M1 and sigma-1 receptor

agonist prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology”, featured the orally

available small molecule ANAVEX ® 3-71 (AF710B ).

The preclinical study described the potential disease-modifying

properties of ANAVEX ® 3-71 on Alzheimer’s disease pathology as a possible drug candidate for a potential once

daily oral preventive strategy for Alzheimer’s disease.

on these results, and ANAVEX ® 3-71’s pre-clinical profile, we intend to advance ANAVEX ® 3-71

into a biomarker-driven clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease,

evaluating longitudinal effect of treatment with ANAVEX ® 3-71.

We believe the results of these clinical trials and

preclinical study could serve as a basis for advancing into respective registration trials in the U.S.

Our research and development pipeline includes

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the common SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved

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

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

The results from this evaluation supported the continued evaluation of genomic

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genomic precision medicine biomarkers identified in the ANAVEX ® 2-73 Phase 2a trial.

The Phase 2b/3 trial, which

has completed enrollment, randomized 1:1:1 to either two different ANAVEX ® 2-73 doses or placebo.

We believe preclinical data from our studies

also supports ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative diseases beyond Alzheimer’s

disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms, Fragile X syndrome, Angelman

syndrome, multiple sclerosis and, more recently, tuberous sclerosis complex (TSC).

ANAVEX ® 2-73 demonstrated significant

improvements in all of these indications in the respective preclinical animal models.

also supports further research into the use of ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative

diseases beyond Alzheimer’s disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms,

Fragile X syndrome, Angelman syndrome, multiple sclerosis, and, more recently, tuberous sclerosis complex (TSC).

ANAVEX ® 2-73

demonstrated significant improvements in all of these indications in the respective preclinical animal models.

In a preclinical study sponsored by the Foundation

for Angelman Syndrome, ANAVEX ® 2-73 was assessed in a mouse model for the development of audiogenic seizures.

results indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures.

sponsored by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX ® 2-73 restored

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

BDNF under-expression has been observed in many

neurodevelopmental and neurodegenerative pathologies.

BDNF signaling promotes maturation of both excitatory and inhibitory synapses.

ANAVEX ® 2-73 normalization of BDNF expression could be a contributing factor for the positive data observed in both

neurodevelopmental and neurodegenerative disorders like Angelman and Fragile X syndromes.

results indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures in mice.

a study sponsored by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX ® 2-73

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

BDNF under-expression has been observed

in many neurodevelopmental and neurodegenerative pathologies.

BDNF signaling promotes maturation of both excitatory and inhibitory

ANAVEX ® 2-73 normalization of BDNF expression could be a contributing factor for the positive preclinical

data observed in both neurodevelopmental and neurodegenerative disorders like Angelman and Fragile X syndromes.

In addition, preclinical data to-date also

indicates that ANAVEX ® 2-73 has the potential to demonstrate protective effects of mitochondrial enzyme complexes

during pathological conditions, which, if impaired, are believed to play a role in the pathogenesis of neurodegenerative and neurodevelopmental

during pathological conditions, which, if impaired, may play a role in the pathogenesis of neurodegenerative and neurodevelopmental

In addition, preclinical data on ANAVEX ® 2-73

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

In April 2016, the FDA granted Orphan Drug Designation

to ANAVEX ® 3-71 for the treatment of FTD.

In April 2016, the FDA granted Orphan

Drug Designation to ANAVEX ® 3-71 for the treatment of FTD.

During pathological conditions ANAVEX ® 3-71

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The trial took place in Australia and was a double-blind, randomized, placebo-controlled,

Phase 1 trial to evaluate safety and tolerability, and PK of oral escalating doses of ANAVEX ® 3-71 including effects

of food and gender in healthy volunteers.

The trial met its primary and secondary endpoints of safety, respectively with no serious

adverse events (SAEs) or dose-limiting toxicities observed, as more fully described above under Clinical Trials Overview –

Frontotemporal Dementia .

Based on these results, and ANAVEX ® 3-71

pre-clinical profile, the Company intends to advance ANAVEX ® 3-71 into a biomarker-driven clinical development dementia

program for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect of treatment with

ANAVEX ® 3-71.

We believe the results of this clinical trial and preclinical study could serve as a basis for advancing

into respective registration trials in the U.S.

Phase 1 trial to evaluate safety and tolerability, and PK of oral escalating doses of ANAVEX ® 3-71

including effects of food and gender in healthy volunteers.

The trial met its primary and

secondary endpoints of safety, respectively, with no serious adverse events (SAEs) or dose-limiting toxicities observed, as

more fully described above under Clinical Trials Overview – Frontotemporal Dementia .

on these results, and ANAVEX ® 3-71 pre-clinical profile, the Company intends to advance ANAVEX ® 3-71

into a biomarker-driven clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease,

evaluating longitudinal effect of treatment with ANAVEX ® 3-71.

We believe the results of this clinical trial and

preclinical study could serve as a basis for advancing into respective registration trials in the U.S.

ANAVEX ® 1-41

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ANAVEX ® 1066

ANAVEX ® 1066, a mixed

sigma-1/sigma-2 ligand is designed for the potential treatment of neuropathic and visceral pain.

ANAVEX ® 1066 was

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

In the chronic

constriction injury model of neuropathic pain, a single oral administration of ANAVEX ® 1066 dose-dependently restored

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

was rapid and remained significant for two hours.

In a model of visceral pain, chronic colonic hypersensitivity was induced by

injection of an inflammatory agent directly into the colon and a single oral administration of ANAVEX ® 1066 returned

the nociceptive threshold to control levels in a dose-dependent manner.

Companion studies in rats demonstrated the lack of any

effects on normal gastrointestinal transit with ANAVEX ® 1066 and a favorable safety profile in a battery of behavioral

ANAVEX ® 1066, a mixed sigma-1/sigma-2

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

ANAVEX ® 1066 was tested in two

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

In the chronic constriction injury

model of neuropathic pain, a single oral administration of ANAVEX ® 1066 dose-dependently restored the nociceptive

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

Efficacy was rapid and remained

significant for two hours.

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

agent directly into the colon and a single oral administration of ANAVEX ® 1066 returned the nociceptive threshold

to control levels in a dose-dependent manner.

Companion studies in rats demonstrated the lack of any effects on normal gastrointestinal

transit with ANAVEX ® 1066 and a favorable safety profile in a battery of behavioral measures.

ANAVEX ® 1037

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Central Nervous System Diseases

Alzheimer’s disease – In 2022, an estimated 6.5 million Americans were suffering from Alzheimer’s disease.

The Alzheimer’s Association ® estimates that by 2050, this number is expected to rise to 12.7 million Americans.

Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the ability to stop its onset or its progression.

We believe there is an urgent and unmet need for both a disease modifying cure for Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.

It is associated with degeneration of the basal ganglia of the brain and a deficiency of the neurotransmitter dopamine.

Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease market is expected to reach to $11.5 billion by 2029, according to GlobalData.

Rett syndrome – Rett

syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain develops, including protein

transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.

It is considered a rare, progressive

neurodevelopmental disorder and is caused by a single mutation in the MECP2 gene.

Because males have a different chromosome combination

from females, boys who have the genetic MECP2 mutation are affected in devastating ways.

Most of them die before birth or in early

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

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

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

Depression – Depression is a major cause of morbidity worldwide according to the World Health Organization.

The global antidepressant drug market is projected to reach $21 Billion by 2030 according to Allied Market Research.

Pharmaceutical treatment for depression has been historically dominated by blockbuster brands.

However, the dominance of the leading brands is waning, largely due to an increase in the number of approvals for antidepressant drugs.

Epilepsy – Epilepsy

is a common chronic neurological disorder characterized by recurrent unprovoked seizures.

These seizures are transient signs and/or

symptoms of abnormal, excessive or synchronous neuronal activity in the brain.

According to the Centers for Disease Control and Prevention,

in 2015 epilepsy affected 3.4 million Americans.

Today, epilepsy is often controlled, but not cured, with medication that is categorized

as older traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Because epilepsy afflicts sufferers in different

ways, there is a need for drugs used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic

Neuropathic Pain –

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

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

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

Malignant Melanoma – Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and the eye.

disease – In 2023, an estimated 6.7 million Americans aged 65 and older are suffering from Alzheimer’s disease.

The Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s and other

dementias is projected to double by 2050.

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

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

We believe that there is an urgent and unmet need for both

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

disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity,

and slow, imprecise movement.

It is associated with degeneration of the basal ganglia of the brain and a deficiency of the

neurotransmitter dopamine.

Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide,

typically middle-aged and elderly people.

The Parkinson’s disease market is expected to reach $11.5 billion by 2029,

according to GlobalData.

syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way

the brain develops, including protein transcription, which is altered and as a result leads to severe disruptions in neuronal

It is considered a rare, progressive neurodevelopmental disorder and is caused by a single mutation in the

Because males have a different chromosome combination from females, boys who have the genetic MECP2 mutation

are affected in devastating ways.

Most of them die before birth or in early infancy.

For females who survive infancy,

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

severe mental retardation,

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

Rett syndrome

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

neurodevelopmental

presentations

characterized

approximately

1:6,000-8,000

– Depression is a major cause of morbidity worldwide according to the World Health Organization.

The global antidepressant

drug market is projected to reach $21 Billion by 2030 according to Allied Market Research.

Pharmaceutical treatment for depression

has been historically dominated by blockbuster brands.

However, the dominance of the leading brands is waning, largely due

to an increase in the number of approvals for antidepressant drugs.

– Epilepsy is a common chronic neurological disorder characterized by recurrent unprovoked seizures.

These seizures

are transient signs and/or symptoms of abnormal, excessive or synchronous neuronal activity in the brain.

According to the

Centers for Disease Control and Prevention, in 2015 epilepsy affected 3.4 million Americans.

Today, epilepsy is often controlled,

but not cured, with medication that is categorized as older traditional anti-epileptic drugs and second generation anti-epileptic

Because epilepsy afflicts sufferers in different ways, there is a need for drugs used in combination with both traditional

anti-epileptic drugs and second generation anti-epileptic drugs.

Pain – We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in

any part of the body.

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

to normal pain medications.

Special medications have become more specific to neuralgia and typically fall under the category

of membrane stabilizing drugs or antidepressants.

Melanoma – Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and the

Malignant melanoma accounts for a large majority of skin cancer deaths.

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

The treatment includes surgical removal of the

tumor, adjuvant treatment, chemo and immunotherapy, or radiation therapy.

According to iHealthcareAnalyst, Inc.

the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029.

Prostate Cancer

– Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive

the worldwide

malignant melanoma market is expected to grow to $7.5 billion by 2029.

Cancer – Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive

Cancer cells may metastasize from the prostate to other parts of the body, particularly the bones and lymph nodes.

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Research Future.

Pancreatic Cancer

– Pancreatic cancer is a malignant neoplasm of the pancreas.

In the United States, approximately 62,000 new cases of

pancreatic cancer will be diagnosed this year and approximately 50,000 patients will die as a result of their cancer, according

Cancer – Pancreatic cancer is a malignant neoplasm of the pancreas.

In the United States, approximately 62,000 new cases

of pancreatic cancer will be diagnosed this year and approximately 50,000 patients will die as a result of their cancer, according

to the American Cancer Society.

Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical

treatment of pancreatic cancer will increase from $2.59 billion in 2022 to $3.73 billion by 2027.

treatment of pancreatic cancer will increase to $3.7 billion by 2027.

The drug discovery and development industry

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products that we may develop.

We believe our approach to the treatment of

Alzheimer’s disease and other CNS diseases differs from our competitors - our platform may offer a disease-modifying approach

We believe our approach to the treatment

of Alzheimer’s disease and other CNS diseases differs from our competitors - our platform may offer a disease-modifying approach

in neurodegenerative and neurodevelopmental diseases by activation of SIGMAR1.

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agencies, both in the United States and abroad.

Our competitors may have significantly greater

financial resources, an established presence in the market, expertise in research and development, manufacturing, preclinical and

clinical testing, may be in the process of obtaining regulatory approvals and marketing of approved products.

Our competitors may have significantly

greater financial resources, an established presence in the market, expertise in research and development, manufacturing, preclinical

and clinical testing, may be in the process of obtaining regulatory approvals and marketing of approved products.

These competitors

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Patents, Trademarks and Intellectual

We hold ownership or exclusive rights

to seventeen U.S.

patents, nineteen U.S.

We hold ownership or exclusive rights to twenty-two

patents, twenty-three U.S.

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

patent applications relating to our drug

candidates, methods associated therewith, and to our research programs.

patent applications relating to our drug candidates,

methods associated therewith, and to our research programs.

We own one issued U.S.

patent entitled

“ANAVEX ® 2-73 and certain anticholinesterase inhibitors composition and method for neuroprotection” claims

a composition of matter of ANAVEX ® 2-73 directed to a novel and synergistic neuroprotective compound combined with

donepezil and other cholinesterase inhibitors.

patent entitled “ANAVEX ® 2-73

and certain anticholinesterase inhibitors composition and method for neuroprotection” claims a composition of matter of ANAVEX ® 2-73

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

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

We own one issued U.S.

entitled “A2-73 crystalline polymorph compositions of matter and methods of use thereof”.

It claims crystals of A2-73

freebase or its fumarate salt, dosage forms and pharmaceutical formulations.

This patent is expected to expire in July 2039, absent

any patent term extension for regulatory delays.

We own four issued U.S.

patents each with claims directed to crystalline forms

of ANAVEX ® 2-73.

The first of these four patents claims crystalline forms of ANAVEX ® 2-73, dosage forms

and compositions containing crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using

This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays.

The second of these

four patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment

for Alzheimer’s disease using the compositions.

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

for regulatory delays.

We own three issued U.S.

patents each with claims directed to crystalline forms of ANAVEX ® 2-73.

The first of these three patents claims crystalline forms of ANAVEX ® 2-73, dosage forms and compositions containing

crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using them.

This patent is expected

to expire in July 2036, absent any patent term extension for regulatory delays.

The second of these three patents claims pharmaceutical

compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease

using the compositions.

This patent is expected to expire in June 2037, absent any patent term extension for regulatory delays.

The third of these three patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73,

regulatory delays.

The third of these four patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73,

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

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absent any patent term extension for regulatory delays.

We also own two issued U.S.

The fourth of these four patents claims method of making certain crystalline

forms ANAVEX ® 2-73.

This patent is expected to expire in October 2036, absent any patent term extension for regulatory

We also own three issued U.S.

patents for seizure treatment.

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

combined with either:

(i) ANAVEX ® 2-73 and its active metabolite ANAVEX ® 19-144;

The first of these three patents claims methods and dosage

forms for treating seizures, the dosage forms containing a low-dose anti-epilepsy drug combined with either:

(i) ANAVEX ® 2-73

and its active metabolite ANAVEX ® 19-144;

or (ii) ANAVEX ® 19-144.

The second of these two patents further claims a combination seizure treatment involving administration of an anti-epilepsy drug

combined with (i) ANAVEX ® 19-144, or (ii) ANAVEX 19-144 ® and ANAVEX 2-73 ® .

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

The second of these three patents

further claims a combination seizure treatment involving administration of an anti-epilepsy drug combined with (i) ANAVEX ® 19-144,

or (ii) ANAVEX 19-144 ® and ANAVEX 2-73 ® .

The third of these three patents claims a dosage form for

seizure reduction, comprising (i) ANAVEX19-144 ® , (ii) ANAVEX 2-73 ® , or (iii) a combination of ANAVEX19-144 ®

and ANAVEX 2-73 ® ;

and optionally further comprising a low-dose anti-epilepsy drug.

All three patents are

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

We also own three issued U.S.

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These patents claim methods for treating a neurodevelopmental disorder,

multiple sclerosis, or their related biochemical and functional abnormalitiesby administering ANAVEX ® 2-73, ANAVEX ® 19-144,

multiple sclerosis, or their related biochemical and functional abnormalities by administering ANAVEX ® 2-73, ANAVEX ® 19-144,

and/or ANAVEX ® 1-41 (another sigma receptor ligand similar to ANAVEX ® 2-73), or compositions thereof.

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This patent is expected to expire in September 2038, absent any patent term extension for regulatory delays.

Further, we own one

Patent with claims directed to a method of treating systolic hypertension using ANAVEX ® 2-73.

is expected to expire in July 2039, absent any patent term extension for regulatory delays.

Additionally, we own one issued U.S.

Patent with claims directed to pharmaceutical dosage forms of (-) enantiomer of ANAVEX ® 2-73.

This patent is expected

to expire in July 2036, absent any patent term extension for regulatory delays.

We also own two issued U.S.

related to ANAVEX ® 1066.

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

ANAVEX ® 1066 isomer.

The second patent claims methods for treating or preventing pain using (-) ANAVEX ® 1066

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

patents related

to ANAVEX ® 1066.

The first of these two patents claims methods for treating or preventing pain using (+) ANAVEX ® 1066

The second patent claims methods for treating or preventing pain using (-) ANAVEX ® 1066 isomer.

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

For ANAVEX ® 2-73, ANAVEX ® 19-144,

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

We also own other patent applications

directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional protection for

one or more of our product candidates.

We regard patents and other intellectual

property rights as corporate assets.

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

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

In addition to

filings made with intellectual property authorities, we protect our intellectual property and confidential information by means

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

agreements and provisions for the same in contractor’s agreements.

While no agreement offers absolute protection, such agreements

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

Our intellectual property position,

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

principles are unresolved.

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

We also own other patent applications directed

to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional protection for one or more

of our product candidates.

We regard patents and other intellectual property

rights as corporate assets.

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

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

In addition to filings made

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

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

and provisions for the same in contractor’s agreements.

While no agreement offers absolute protection, such agreements provide

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

intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions

for which important legal principles are unresolved.

For more information regarding challenges to our existing or future patents,

see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Government regulation

Government authorities in the United

States, at the federal, state and local levels, and other countries extensively regulate, among other things, the research, development,

Government authorities in the United States,

at the federal, state and local levels, and other countries extensively regulate, among other things, the research, development,

testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,

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The sponsor must also include a protocol

detailing, among other things, the objectives of the first phase of clinical trials, the parameters to be used in monitoring the

safety of the trial, and the effectiveness criteria to be evaluated should the first phase lend itself to an efficacy evaluation.

Some preclinical testing may continue even after the IND is filed.

The IND automatically becomes effective thirty (30) days after

receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold.

Clinical holds

also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about ongoing or proposed clinical

trials or non-compliance with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor

that the hold has been lifted.

detailing, among other things, the objectives of the clinical trials, the parameters to be used in monitoring the safety of the

trial, and the effectiveness criteria to be evaluated should the trial include an efficacy evaluation.

Some preclinical testing

may continue even after the IND is filed.

The IND automatically becomes effective thirty (30) days after receipt by the FDA, unless

the FDA, within the 30-day time period, places the clinical trial on a clinical hold.

Clinical holds also may be imposed by the

FDA at any time before or during clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance

with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor that the hold has been

All clinical trials must be conducted under

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under certain limited circumstances.

The FDA reviews NDAs to determine, among

other things, whether the product is safe and effective for its intended use and whether it is manufactured in a cGMP-compliant

manner, which will assure and preserve the product’s identity, strength, quality and purity.

Under the Prescription Drug

User Fee Act (“PDUFA”), the FDA has a goal of ten months from the date of “filing” of a standard, completed

NDA for a new molecular entity to review and act on the submission.

This review typically takes twelve months from the date the

NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision after the application

The FDA reviews NDAs to determine, among other

things, whether the product is safe and effective for its intended use and whether it is manufactured in a cGMP-compliant manner,

which will assure and preserve the product’s identity, strength, quality and purity.

Under the Prescription Drug User Fee

Act (“PDUFA”), the FDA has a goal of ten months from the date of “filing” of a standard, completed NDA

for a new molecular entity to review and act on the submission.

This review typically takes twelve months from the date the NDA

is submitted to the FDA because the FDA has approximately two months to make a “filing” decision after the application

is submitted.

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coverage and reimbursement

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.

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.

Third-party 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.

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

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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.

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.

Fraud and Abuse Laws

Federal and state health care laws and

regulations restrict business practices in the biopharmaceutical industry.

In the biopharmaceutical industry, there are a number

of federal and state health care regulatory requirements that apply to entities, including, but not limited to, the federal and

state fraud and abuse laws.

These laws include, but are not limited to, anti-kickback and self-referral law, civil false claims

act law, criminal false statement law, civil monetary penalty laws, exclusion law, and other civil, criminal, and administrative

Health care laws, regulations, and guidance continuously evolve and are thereby subject to constant change.

Federal and state health care laws and regulations

restrict business practices in the biopharmaceutical industry.

In the biopharmaceutical industry, there are a number of federal

and state health care regulatory requirements that apply to entities, including, but not limited to, the federal and state fraud

and abuse laws.

These laws include, but are not limited to, anti-kickback and self-referral law, civil false claims act law, criminal

false statement law, civil monetary penalty laws, exclusion law, and other civil, criminal, and administrative laws.

laws, regulations, and guidance continuously evolve and are thereby subject to constant change.

The Federal Anti-Kickback Statute, 42 U.S.C.

§ 1320a-7b(b), among other things, prohibits the knowing and willful offer, payment, solicitation or receipt of any form of

remuneration, whether directly or indirectly and overtly or covertly in cash or in kind, in return for, or to induce the referral

of an individual for the:

or arranging for the furnishing of items or services reimbursable in whole or in part under Medicare, Medicaid or other federal

healthcare programs;

lease, or order of, or the arrangement or recommendation of the purchasing, leasing, or ordering of any item or service reimbursable

in whole or in part under Medicare, Medicaid or other federal healthcare programs.

There are a number of narrow safe harbors to

the Federal Anti-Kickback Statute.

§ 1320a-7b(b), among other things, prohibits the knowing and willful offer, payment, solicitation or receipt of any

form of remuneration, whether directly or indirectly and overtly or covertly in cash or in kind, in return for, or to induce the

referral of an individual for the:

furnishing or arranging for the furnishing of items or services reimbursable in whole or in part under Medicare, Medicaid or other federal healthcare programs;

purchase, lease, or order of, or the arrangement or recommendation of the purchasing, leasing, or ordering of any item or service reimbursable in whole or in part under Medicare, Medicaid or other federal healthcare programs.

There are a number of narrow safe harbors

to the Federal Anti-Kickback Statute.

Such safe harbors permit certain payments and business practices that, although they would

otherwise potentially implicate the Federal Anti-Kickback Statute, are not treated as an offense under the same if all of the requirements

Such safe harbors permit certain payments and business practices that, although they would otherwise

potentially implicate the Federal Anti-Kickback Statute, are not treated as an offense under the same if all of the requirements

of the specific applicable safe harbor are met.

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in order for a person or entity to have committed a violation.

The Federal Anti-Kickback Statute applies

to certain arrangements with healthcare providers, product end users and other parties, including marketing arrangements and discounts

The Federal Anti-Kickback Statute applies to

certain arrangements with healthcare providers, product end users and other parties, including marketing arrangements and discounts

and other financial incentives offered in connection with the sales of our products.

10 unchanged sentences

False Claims Act and the civil monetary penalties statute.

The federal Health Insurance Portability and Accountability

Act of 1996 (“HIPAA”) among other things, enacted numerous provisions that prohibit knowingly and willfully executing, or

attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses,

representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program,

regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly

and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious

or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare

The federal Health Insurance Portability and

Accountability Act of 1996 (“HIPAA”) among other things, enacted numerous provisions that prohibit knowingly and willfully

executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false

or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of,

any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation

of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact

or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare

benefits, items or services relating to healthcare matters.

These provisions include 18 U.S.C.

§§ 286, 287, 669, 1035,

1347, and 1518, all as described further below.

The Ethics in Patient Referrals Act,

commonly known as the “Stark Law,” 42 U.S.C.

§ 1395nn, prohibits a physician from making referrals for certain

“designated health services” payable by Medicare to an entity in which the physician or an immediate family member

of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement,

unless a statutory exception applies.

The Ethics in Patient Referrals Act, commonly

known as the “Stark Law,” 42 U.S.C.

§ 1395nn, prohibits a physician from making referrals for certain “designated

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

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

exception applies.

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.

Violation of the Stark Law could result in denial of payment,

disgorgement of reimbursements received under a noncompliance arrangement, civil penalties, damages and exclusion from Medicare

or other governmental programs.

These requirements are highly technical and there can be no guarantee that regulatory authorities

will not determine or assert that arrangements are in violation of the Stark Law and do not otherwise meet applicable Stark Law

The federal false statements statute,

§ 1320a-7b(a), prohibits knowingly and willfully falsifying, concealing, or omitting a material fact or making any

materially false statement in connection with the delivery of health care benefits, items, or services.

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.

Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements

received under a noncompliance arrangement, civil penalties, damages and exclusion from Medicare or other governmental programs.

These requirements are highly technical and there can be no guarantee that regulatory authorities will not determine or assert

that arrangements are in violation of the Stark Law and do not otherwise meet applicable Stark Law exceptions.

The federal false statements statute, 42 U.S.C.

§ 1320a-7b(a), prohibits knowingly and willfully falsifying, concealing, or omitting a material fact or making any materially

false statement in connection with the delivery of health care benefits, items, or services.

Similarly, 18 U.S.C.

1035 prohibits a person or entity, in any matter involving a health care benefit program, from knowingly or willfully falsifying,

concealing, or covering up by any trick, scheme, or device a material fact;

making any materially false, fictitious, or fraudulent

statements or representations;

or making or using any materially false writing or document knowing the same to contain any materially

false, fictitious, or fraudulent statement or entry.

In addition to criminal penalties, violation of these statutes may result

in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care

§ 669 prohibits knowingly

and willfully embezzling, stealing, or otherwise without authority converting to the use of any person or entity other than the

rightful owner, or intentionally misapplying any of the moneys, funds, securities, premiums, credits, property, or other assets

of a health care benefit program.

In addition to criminal penalties, violation of this statute may result in collateral administrative

sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs.

§ 1035 prohibits

a person or entity, in any matter involving a health care benefit program, from knowingly or willfully falsifying, concealing,

or covering up by any trick, scheme, or device a material fact;

making any materially false, fictitious, or fraudulent statements

or representations;

or making or using any materially false writing or document knowing the same to contain any materially false,

fictitious, or fraudulent statement or entry.

In addition to criminal penalties, violation of these statutes may result in collateral

administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs.

§ 669 prohibits knowingly and

willfully embezzling, stealing, or otherwise without authority converting to the use of any person or entity other than the rightful

owner, or intentionally misapplying any of the moneys, funds, securities, premiums, credits, property, or other assets of a health

care benefit program.

In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions,

including exclusion from participation in Medicare, Medicaid and other federal health care programs.

The criminal health care fraud statute, 18

13 unchanged sentences

in Medicare, Medicaid and other federal health care programs.

§ 286 establishes criminal

liability for whoever enters into any agreement, combination, or conspiracy to defraud the United States, or any department or

agency thereof, by obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim.

to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation

§ 286 establishes criminal liability

for whoever enters into any agreement, combination, or conspiracy to defraud the United States, or any department or agency thereof,

by obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim.

In addition to criminal

penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation

in Medicare, Medicaid and other federal health care programs.

§ 287 establishes criminal

liability for whoever knowingly makes or presents a false, fictitious or fraudulent claim to the United States Government, including

any department or agency thereof.

§ 287 establishes criminal liability

for whoever knowingly makes or presents a false, fictitious or fraudulent claim to the United States Government, including any

department or agency thereof.

In addition to criminal penalties, violation of this statute may result in collateral administrative

1 unchanged sentence

The Federal False Claims Act, 31 U.S.C.

§ 3729, et seq., provides, in part, that the federal government—or a private party on behalf of the government—may

bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent claim

for payment, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation

3729, et seq., provides, in part, that the federal government—or a private party on behalf of the government—may bring

a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent claim for

payment, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation

to pay money to the federal government or who has knowingly retained an overpayment.

3 unchanged sentences

Act have made it easier for private parties to bring whistleblower lawsuits against companies.

The civil monetary penalties law, 42

§ 1320a-7a, provides, in part, that the federal government may seek civil monetary penalties against any person who

presents or causes to be presented claims to a Federal health care program that the person knows or should know is for an item

or services that was not provided as claimed or is false or fraudulent, or the person has made a false statement or used a false

record to get a claim paid.

The federal government may also seek civil monetary penalties for a wide variety of other conduct,

including offering remuneration to influence a Medicare or Medicaid beneficiary’s selection of providers and violations of

the Federal Anti-Kickback Statute.

Violations of the Federal False Claims

Act and/or the Civil Monetary Penalties Law can result in penalties ranging from $12,537 to $25,076 for each false claim violation

The civil monetary penalties law, 42 U.S.C.

§ 1320a-7a, provides, in part, that the federal government may seek civil monetary penalties against any person who presents

or causes to be presented claims to a Federal health care program that the person knows or should know is for an item or services

that was not provided as claimed or is false or fraudulent, or the person has made a false statement or used a false record to

get a claim paid.

The federal government may also seek civil monetary penalties for a wide variety of other conduct, including

offering remuneration to influence a Medicare or Medicaid beneficiary’s selection of providers and violations of the Federal

Anti-Kickback Statute.

Violations of the Federal False Claims Act

and/or the Civil Monetary Penalties Law can result in penalties ranging from $12,537 to $25,076 for each false claim violation

of the Federal False Claims Act and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up

2 unchanged sentences

from participation in all federal health care programs.

Section 1320a-7 provides that

individuals and entities can be mandatorily or permissively excluded from participation in federal health care programs.

for mandatory exclusion include, but are not limited to, conviction for a criminal offense related to the delivery of an item or

service reimbursed under a federal or state health care program, and a conviction related to health care fraud.

The grounds for

permissive exclusion include, but are not limited to, criminal offenses relating to fraud inside and outside of health care, convictions

related to obstruction of an investigation or audit, and/or failure to disclose certain required information.

Exclusion from federal

health care programs—whether mandatory or permissive—may mean that our customers may not be able to get reimbursed

by federal and/or state health care programs for use or dispensing of our products .

Section 1320a-7 provides that individuals

and entities can be mandatorily or permissively excluded from participation in federal health care programs.

The grounds for mandatory

exclusion include, but are not limited to, conviction for a criminal offense related to the delivery of an item or service reimbursed

under a federal or state health care program, and a conviction related to health care fraud.

The grounds for permissive exclusion

include, but are not limited to, criminal offenses relating to fraud inside and outside of health care, convictions related to

obstruction of an investigation or audit, and/or failure to disclose certain required information.

Exclusion from federal health

care programs—whether mandatory or permissive—may mean that our customers may not be able to get reimbursed by federal

and/or state health care programs for use or dispensing of our products.

State Fraud and Abuse Provisions

Many states have also adopted some form

of anti-kickback and anti-referral laws and false claims acts and civil monetary penalties and other fraud and abuse provisions

that apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs.

Many states have also adopted some form of

anti-kickback and anti-referral laws and false claims acts and civil monetary penalties and other fraud and abuse provisions that

apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs.

A determination

1 unchanged sentence

in these jurisdictions.

Corporate liability can be present as

a result of the illegal activities of employees, representatives, contractors, collaborators, agents, subsidiaries, or affiliates,

even if they were not explicitly authorized.

Corporate liability can be present as a result

of the illegal activities of employees, representatives, contractors, collaborators, agents, subsidiaries, or affiliates, even

if they were not explicitly authorized.

There can be no assurance that all employees, representatives, contractors, collaborators,

17 unchanged sentences

could adversely affect the ability to operate the business, financial condition, and the results of operations.

Sunshine Act requires manufacturers of products reimbursed by Medicare, Medicaid or the Children’s Health Insurance Program

(“CHIP”) to collect and annually report detailed data to the Centers for Medicare and Medicaid Services (“CMS”)

regarding payments or other transfers of value to physicians, certain other health care providers (such

as physicians assistants and nurse practitioners), and teaching hospitals (“covered recipients”), as well as

any ownership or investment interest held by physicians and their immediate family members.

The reporting data must be accompanied

by an attestation as to the accuracy of the data and failure to timely and accurately submit required information may result in

civil monetary penalties.

Health Insurance Portability and

Accountability Act

Besides enacting the program integrity provisions described above, HIPAA, also

created a new set of privacy and security requirements.

As amended by the Health Information Technology for Economic and Clinical Health

Act, and implementing regulations thereunder, HIPAA requires certain healthcare providers, health plans and healthcare clearinghouses

who conduct specified electronic healthcare transactions (“covered entities”), as well as their independent contractors and

agents who conduct certain activities involving protected health information on their behalf (“business associates”) to comply

with enumerated requirements relating to the privacy, security and transmission of protected health information.

Failure to comply with

HIPAA can result in corrective action, as well as civil fines and penalties and government oversight.

Among other changes, HITECH made

HIPAA security standards directly applicable to business associates, increased the tiered civil and criminal fines and penalties that

may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority

to file actions to enforce HIPAA.

Further, the breach notification rule implemented under HITECH requires covered entities to notify affected

individuals, the U.S.

Department of Health and Human Services Office of Civil Rights (“OCR”), the agency that enforces HIPAA,

and for breaches affecting more than 500 individuals, the media, of any breaches of unsecured protected health information.

not create a private right of action for individuals, though individuals may submit complaints related to HIPAA to OCR.

The Sunshine Act requires manufacturers of

products reimbursed by Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”) to collect and

annually report detailed data to the Centers for Medicare and Medicaid Services (“CMS”) regarding payments or other

transfers of value to physicians, certain other health care providers (such as physicians assistants

and nurse practitioners), and teaching hospitals (“covered recipients”), as well as any ownership or investment

interest held by physicians and their immediate family members.

The reporting data must be accompanied by an attestation as to

the accuracy of the data and failure to timely and accurately submit required information may result in civil monetary penalties.

Health Insurance Portability and Accountability

Besides enacting the program integrity provisions

described above, HIPAA, also created a new set of privacy and security requirements.

As amended by the Health Information Technology

for Economic and Clinical Health Act, and implementing regulations thereunder, HIPAA requires certain healthcare providers, health

plans and healthcare clearinghouses who conduct specified electronic healthcare transactions (“covered entities”),

as well as their independent contractors and agents who conduct certain activities involving protected health information on their

behalf (“business associates”) to comply with enumerated requirements relating to the privacy, security and transmission

of protected health information.

Failure to comply with HIPAA can result in corrective action, as well as civil fines and penalties

and government oversight.

Among other changes, HITECH made HIPAA security standards directly applicable to business associates,

increased the tiered civil and criminal fines and penalties that may be imposed against covered entities, business associates and

possibly other persons, and gave state attorneys general new authority to file actions to enforce HIPAA.

Further, the breach notification

rule implemented under HITECH requires covered entities to notify affected individuals, the U.S.

Department of Health and Human

Services Office of Civil Rights (“OCR”), the agency that enforces HIPAA, and for breaches affecting more than 500 individuals,

the media, of any breaches of unsecured protected health information.

HIPAA does not create a private right of action for individuals,

though individuals may submit complaints related to HIPAA to OCR.

Legislative Activities Aimed at Controlling

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, the U.S.

Department of Health and Human Services (“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 Inflation Reduction Act

(“IRA”) passed on August 16, 2022.

The IRA, among other things, (1) directs HHS to negotiate the price of certain highly-utilized

single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize

price increases that outpace inflation.

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 industry.

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.

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

In response to Biden’s executive order, on September 9, 2021, the U.S.

Department of Health and Human Services (“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 Inflation Reduction Act (“IRA”) passed on August 16, 2022.

The IRA, among other

things, (1) directs HHS to negotiate the price of certain highly-utilized single-source drugs and biologics covered under Medicare

and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

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 industry.

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.

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.

Research and Development Expenses

Historically, a significant portion

of our operating expenses has related to research and development.

See our Consolidated Financial Statements contained elsewhere

in this Annual Report for costs and expenses related to research and development, and other financial information for fiscal years

Historically, a significant portion of our

operating expenses has related to research and development.

See our Consolidated Financial Statements contained elsewhere in this

Annual Report for costs and expenses related to research and development, and other financial information for fiscal years 2023,

2022 and 2021.

Scientific Advisors

We are advised

by scientists and physicians with experience relevant to our Company and our product candidates.

Our scientific advisors

include clinicians and scientists who are affiliated with a number of highly regarded medical institutions.

We currently have approximately thirty-eight full-time

We are advised by

scientists and physicians with experience relevant to our Company and our product candidates.

Our scientific advisors include

clinicians and scientists who are affiliated with a number of highly regarded medical institutions.

We currently have approximately forty full-time

employees, and we retain several independent contractors on a regular or as-needed basis.

We believe that we have good relations with

our employees.

We believe that we have good relations

with our employees.

Available Information

website address is www.anavex.com .

Our internet website address is www.anavex.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed

or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website.

our website address in this report only as an inactive textual reference and do not intend it to be an active link to our website.

The contents of our website are not incorporated into this report.

or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available there free of charge.

We include our website

address in this report only as an inactive textual reference and do not intend it to be an active link to our website.

of our website are not incorporated into this report.

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 1. Business